Lotte Corporation Attracts Four Times Subscription in Bond Demand Forecast... Increases Issuance Amount

Secures 345 Billion Won in Orders Through Bond Demand Forecast

Lotte Corporation (A+) secured orders totaling 345 billion won in a demand forecast for 80 billion won worth of unsecured bonds.

According to the investment banking (IB) industry on the 25th, Lotte Corporation attracted more than four times the planned subscription amount, leading the company to decide to increase the issuance from the originally planned 80 billion won to 150 billion won.

By maturity, 205 billion won was allocated to the two-year bonds, which had targeted a subscription of 40 billion won, and 140 billion won was allocated to the three-year bonds, which also targeted a subscription of 40 billion won. The spread for the two-year bond was set at 1 basis point (bp; 1bp=0.01% point) lower than the individual fair yield, while the three-year bond matched the fair yield.

However, as the company decided to increase the issue amount for the two-year note from 40 billion won to 95 billion won, the interest rate was finalized at a level 6bp higher than the individual fair yield. The three-year note was also increased from 40 billion won to 55 billion won, with the yield set 2bp higher than the fair yield. Lotte Corporation had previously suggested a desired public bond yield range within ±30bp of the arithmetic average of the individual fair yields.

Lotte Corporation plans to use the funds raised through this bond issuance to repay corporate bonds (CP) maturing in January next year.

For the first half of the year on a consolidated basis, Lotte Corporation reported sales of 7.7152 trillion won, up 1.1% from 7.6284 trillion won in the same period last year. Operating profit reached 175.1 billion won, representing a 9.3% increase, and net profit turned positive at 78.8 billion won, marking a swing to profitability.

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