Shinhan Investment Corp Issues Third Kimchi Bond in Indonesia, Reaching Cumulative $170 Million

OKI Issues $55 Million Kimchi Bond

From the left, Nam Kyung-hoon, Director of the Indonesia local subsidiary of Korea Investment & Securities, Hendra Kosashi, Vice President of APP Group, and Lee Yong-hoon, Head of Shinhan Financial Investment Indonesia (Provided by Shinhan Financial Investment)

[Asia Economy Reporter Minwoo Lee] Shinhan Financial Investment has issued a $55 million (approximately 60.72 billion KRW) Kimchi bond (foreign currency-denominated bonds issued domestically) for an Indonesian company.

On the 30th, Shinhan Financial Investment announced that it had completed the lead management of the Kimchi bond issuance for Indonesian PT OKI Pulp and Paper Mills (hereafter OKI). This issuance was conducted as a joint lead manager with Korea Investment & Securities. In a situation where overseas on-site inspections were difficult, Shinhan Financial Investment and Korea Investment & Securities deployed professional personnel from the Indonesian local corporation for due diligence, and conducted the inspection through video conferences with management and drone filming of production facilities.

OKI is the world’s number one pulp production capacity company. It is a core affiliate of Asia Pulp and Paper Group (APP Group), the world’s largest integrated paper group. APP Group is the intermediate holding company of Sinar Mas Group, the second largest conglomerate in Indonesia, and has large-scale production bases not only in Indonesia but also in the United States, China, and other countries.

Meanwhile, with this Kimchi bond issuance, Shinhan Financial Investment has achieved a cumulative lead management scale of $170 million (approximately 187.7 billion KRW). Following the industry’s first lead management of a $25 million Kimchi bond issuance for Indonesian company PT Pabrik Kertas Tjiwi Kimia Tbk in 2018, it completed the issuance of a $90 million Kimchi bond for PT Lontar Papyrus Pulp & Paper Industry in May last year.

In addition to Kimchi bonds, Shinhan Financial Investment completed the refinancing of guaranteed floating rate notes (FRN) for Indonesian comprehensive media group PT Global Mediacom TBK last October. Last year, it also invested in convertible preferred shares of Bukalapak, one of Indonesia’s four major unicorns (startups valued at over 1 trillion KRW).