Hanwha Investment & Securities Issues KRW 5 Billion ELB Linked to SK Hynix with Monthly Coupon and Autocall, Principal Protected
Hanwha Investment & Securities has filed a prospectus for the Hanwha Smart ELB No. 1159, a derivative-linked bond linked to SK Hynix common stock, effective July 1, 2026. The issuance amounts to KRW 5 billion with 500,000 securities at KRW 10,000 each.
The ELB offers a monthly coupon of 0.8375% pre-tax if the underlying closes above 55% of the initial strike, equivalent to an annual yield of 10.05%. It also features eleven autocall dates starting from October 2026, where early redemption occurs if the underlying is at or above 70% of the initial price.
At maturity, the principal is fully protected: if the underlying is above 70% of initial, 100% principal is returned; even if below 70%, the full principal is still paid. This makes it a principal-protected structure.
The issuer's credit rating is AA- by NICE as of June 22, 2026. The bonds are unsecured and unguaranteed, relying on the issuer's credit. They are not covered by depositor protection and are not listed, posing liquidity risk and potential loss upon early redemption.
Proceeds will be used for hedging and trading in underlying assets and derivatives. The offering may be cancelled if total subscriptions are below KRW 1 billion.
[AI Summary]This ELB issuance by Hanwha Investment & Securities does not dilute existing shareholders since it is debt. The use of proceeds is conservative for hedging. The issuer has a solid AA- rating, but investors face credit risk and liquidity constraints. The principal-protected feature limits downside, but returns depend on SK Hynix price performance and autocall triggers.