Hyundai Engineering & Construction (000720.KS) said it has successfully completed a 500 billion won convertible bond (CB) offering.
The convertible bonds, issued Friday, carry a coupon rate of 0%, a yield-to-maturity of 0%, and a five-year maturity. The conversion price was set at 150,607 won, a 5% premium to the share price at the time of the board resolution.
Notably, the bonds were issued without the put option and refixing conditions typically granted to investors. Refixing refers to the later adjustment of the price applied when converting CBs into shares.
Convertible bonds are debt securities carrying the right for investors to convert them into shares of the issuing company at a predetermined price after a certain period. When the share price rises, investors can expect gains through conversion into stock. For the issuing company, the advantage is raising funds at a lower interest rate than ordinary corporate bonds.
Hyundai E&C has secured a foundation to manage funds for at least five years without bearing separate interest costs. The company plans to accelerate efforts to strengthen its financial stability and enhance its mid- to long-term credit competitiveness.
"We have confirmed the market's trust in our future growth strategy and financial stability," said Lee Hyung-seok, Hyundai E&C's Chief Financial Officer. "Based on a stable financial structure and credit competitiveness, we will continue to raise our mid- to long-term corporate value."
