Kiwoom Securities Finalizes Equity-Linked Bond Issuance with Principal Loss Risk and High Underlying Volatility
Kiwoom Securities has submitted a supplementary filing for the batch registration of equity-linked derivative bonds. These bonds are not covered by the depositor protection law and there is a possibility of total principal loss.
The underlying assets include high-volatility stocks such as Hyundai Motor with 72.54%, Samsung Electronics with 63.91%, and POSCO Holdings with 58.03%, increasing the risk of principal loss upon early redemption or maturity.
The early redemption price is set at 95% or more of fair value, but at least 90% for the first six months, which may lead to additional losses in early repurchases.
Kiwoom Securities reported net income of 1.0994 trillion KRW for 2025, total dividends of 301.3 billion KRW or 11,500 KRW per common share, and cancelled 105.6 billion KRW in treasury shares, reflecting shareholder returns.
Meanwhile, the Gentu Partners managed fund of 253.5 billion KRW remains fully suspended in redemptions with ongoing valuation and recovery uncertainty, requiring investor caution.
[AI Summary]Despite Kiwoom Securities' AA credit rating, the issuance of equity-linked derivative bonds carries high investment risk due to potential principal loss and high underlying asset volatility. The company's financial structure shows high leverage, but its shareholder return policy including dividends and share buybacks is positive. The Gentu Partners issue may act as an additional risk factor.