This article was published on July 29, 2026, at 6:00 p.m. on Signal, a capital markets compass.
Meritz Financial Group (138040) secured orders worth three times its target amount in its second corporate bond demand forecast of the year. Having attracted numerous blue-chip institutional investors on the strength of its "AA0, stable" credit rating, the company may expand its issuance to as much as 300 billion won.
According to the investment banking (IB) industry on the 29th, Meritz Financial Group began a demand forecast targeting institutional bond investors to raise 150 billion won that day. Institutions placed bids totaling 480 billion won, according to the results. Specifically, 203 billion won came in against the 80 billion won target for two-year notes, and 277 billion won against the 70 billion won target for three-year notes.
The interest rate is also expected to be set lower than levels traded in the market. Ahead of the demand forecast, Meritz Financial Group set its target rate band by adding minus 30 to 30 basis points (1bp = 0.01 percentage point) to its individual private bond valuation rate (a company's specific rate assessed by private bond rating agencies). The demand forecast showed that both the two-year and three-year notes filled their target amounts at minus 6bp against the private valuation rate for the same maturity.
The company is seen to have secured ample demand on the strength of its blue-chip "AA0, stable" credit rating. However, the amount is smaller than the result of the corporate bond demand forecast conducted in February. At that time, Meritz Financial Group also set a target of 150 billion won and secured 725 billion won in institutional demand. The difference is attributed to the impact of surging market interest rates amid growing uncertainty over the war in the Middle East.
Meritz Financial Group has decided to use the funds raised through this public bond issuance to repay debt. Specifically, the funds will be used to refinance 170 billion won in corporate bonds maturing in November this year. As the company has left open a ceiling for increasing the issuance to a maximum of 300 billion won depending on the demand forecast results, there is a possibility the issuance size will grow. NH Investment & Securities, KB Securities, Korea Investment & Securities, and Shinhan Investment Corp. served as joint lead managers for this bond issuance.
