IMM Credit Solutions (ICS) is investing in 100 billion won worth of exchangeable bonds (EB) issued for Hana Micron. Hana Micron is Korea's leading outsourced semiconductor assembly and test (OSAT) company, working with partners such as Samsung Electronics and SK hynix. Its earnings are expected to grow as the artificial intelligence (AI) chip market expands. This marks the third time ICS has executed an exchangeable bond investment.
According to investment banking (IB) industry sources on the 4th, ICS signed a contract to invest in 100 billion won worth of exchangeable bonds for Hana Micron. The bonds are exchangeable for 2,907,991 Hana Micron shares held by Hana Materials, with the exchange price set at 34,388 won. Hana Micron closed at 31,000 won on the stock market that day. The transaction is scheduled to close on September 14.
Hana Micron is Korea's largest integrated semiconductor back-end company. It has built competitiveness in semiconductor packaging and testing, working with Samsung Electronics and SK hynix over the long term. As the AI chip and high-bandwidth memory (HBM) markets have grown recently, demand for capacity expansion and advanced packaging is increasing in the global semiconductor market. With integrated device manufacturers (IDMs) also increasingly outsourcing back-end processes, expectations are rising for medium- to long-term earnings growth at Hana Micron, which holds strengths in this field.
ICS has previously invested in exchangeable bonds of HD Hyundai Heavy Industries and SNT Group. It earned a 25.7% return on 300 billion won worth of HD Hyundai Heavy Industries exchangeable bonds, while the SNT Group exchangeable bonds are understood to be still ahead of the exit stage. Exchangeable bonds are instruments that offer the stability of bonds while allowing investors to earn capital gains by exchanging them for stocks as share prices rise.
"We expect the potential for further share price gains driven by improved earnings at Hana Micron and a re-rating of its valuation, amid structural industry growth and the restructuring of the global semiconductor supply chain," ICS said. "We will discover diverse investment opportunities to provide investors with stable returns."
