Daewoo E&C Issues Bonds Worth 150 Billion KRW in Singapore with CGIF Guarantee

Issued $200 Million Islamic Bonds in Kuwait Last Year
Financing Completed in Singapore Thereafter

Daewoo E&C has succeeded in raising funds in Singapore, an Asian financial hub, following its achievements in the Middle East. On the 5th, Daewoo E&C announced that it issued bonds worth 150 million Singapore dollars (approximately 148.4 billion KRW) guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund under the Asian Development Bank (ADB).

These bonds, which received an AA credit rating from the international credit rating agency S&P, have a 5-year maturity and a fixed interest rate of 3.88%. Despite a period marked by weakened investor sentiment due to diminished expectations of a US interest rate cut, the bonds attracted strong demand from over 20 asset management firms, institutional investors, and private banking clients, resulting in an oversubscription rate of 2.87 times the initial offering amount. The interest rate was also lowered by 22 basis points from the initially proposed rate of 4.1% to the final issuance rate of 3.88%.

CGIF aims to revitalize the bond market within Asia and primarily guarantees corporate bond issuances in financial markets across 13 countries including ASEAN, South Korea, China, and Japan. The financial arrangement was solely led by UOB (United Overseas Bank), a major banking group based in Singapore.

The funds raised this time will be invested in the subway construction project that Daewoo E&C is carrying out in Singapore. It is expected to provide stable momentum for the project until completion. A Daewoo E&C official explained, “It is unprecedented for CGIF to provide a 100% guarantee for bonds issued by a single Korean company,” adding, “This success was due not only to Daewoo E&C’s outstanding project execution capabilities in the countries it has entered but also to the continuous relationship-building with local financial institutions.”

In May last year, Daewoo E&C successfully issued its first Islamic bond worth 100 million USD through Warba Bank in Kuwait, and in July, it issued a second Islamic bond of the same scale.

Lee Yong-hee, Head of Financial Management at Daewoo E&C, stated, “Following the issuance of Islamic bonds in Kuwait last year, successfully issuing bonds targeting institutional investors in the Singapore market demonstrates the strong trust global regional investors have in our overseas business.” He added, “Daewoo E&C will diversify its financial and funding channels in line with balancing its current project portfolio.”