POSCO Future M (003670.KS), the battery materials arm of steelmaker POSCO Holdings, plans to raise up to 500 billion won ($370 million) through public corporate bonds in January, marking its first bond market tap in about 18 months since raising 600 billion won in July 2024.
The company will conduct a book-building process on January 7 for an initial issuance of 250 billion won, with tranches structured as three-year and five-year notes, according to investment banking sources Wednesday. POSCO Future M is considering increasing the size up to 500 billion won. The bond issuance is scheduled for January 15.
NH Investment & Securities, KB Securities, Kiwoom Securities, Samsung Securities, and Mirae Asset Securities are managing the offering.
In its previous bond sale in July 2024, POSCO Future M raised 480 billion won in three-year notes and 120 billion won in five-year notes. The company also secured 1.1 trillion won through a rights offering in July this year.
The proceeds from this bond sale are expected to be used for debt repayment. The company faces maturing corporate bonds of 250 billion won in February and 200 billion won in April next year.
POSCO Future M's corporate bond credit rating stands at AA-, classified as investment grade in the market. However, concerns over a potential credit downgrade are growing as the secondary battery sector continues to struggle amid a prolonged electric vehicle demand slowdown.
Securities analysts expect POSCO Future M to rebound next year. They point to the company's anode materials business in North America, where there are virtually no alternatives outside China, and its lithium iron phosphate (LFP) business for energy storage systems expected to enter the U.S. market.
"Attention should be paid to the value and momentum of POSCO Future M's anode materials business," said Kim Chul-joong, an analyst at Mirae Asset Securities. "Meaningful earnings growth will emerge in the second half of next year."
