Kyobo Securities' 29.7 billion KRW non-principal protected ELS issuance becomes effective: linked to three major global indices with monthly coupon up to 8.10% annual and potential full loss
Kyobo Securities announced the effectiveness of its registration statement for the 13656th equity-linked derivative securities on July 22, 2026. The offering totals 29.7 billion KRW with 3 million securities issued at 9,900 KRW each.
The ELS is linked to S&P 500, EUROSTOXX 50, and Nikkei 225 indices. It pays a monthly coupon of 0.675% 8.10% annual if all indices are above 55% of their initial levels. Auto-call features allow early redemption at par from 6 months to 3 years with step-down barriers.
Classified as a high-difficulty financial product, it carries the risk of total principal loss if any index falls below 55% at maturity. The securities are unlisted, resulting in limited liquidity, and early redemption may incur losses.
Kyobo Securities holds an AA- credit rating from both KIS and NICE, but this debt is unsecured and unsubordinated. Proceeds will be used for hedging and related transactions.
[AI Summary]This ELS issuance does not dilute existing shareholders but creates significant contingent liabilities. The high-risk structure demands investor awareness of potential full loss, while Kyobo's AA- rating provides moderate counterparty safety. The product's complexity and illiquidity are key investment risks.