LG Electronics' "1.1 Trillion Won Scale" Public Foreign Currency Bond Issuance Success

First Dollar-Denominated Foreign Currency Bond Issuance in 17 Years
Strong Performance and Financial Stability Recognized
Utilized to Strengthen Future Competitiveness Including R&D

LG Electronics has succeeded in its public foreign currency bond issuance for the first time in 12 years, enabling it to raise more than 1 trillion won.

According to industry sources on the 19th, LG Electronics confirmed the issuance of bonds totaling $800 million (approximately 1.1 trillion won) after conducting a foreign currency bond demand forecast in the global financial market.

Seoul Yeouido LG Twin Tower view. Photo by Jinhyung Kang aymsdream@

This is LG Electronics' first dollar public foreign currency bond issuance in 17 years since 2007. The public foreign currency bond issuance is the first in 12 years since the issuance of Swiss franc bonds worth $215 million (approximately 260 billion won at the exchange rate at the time) in 2012.

The foreign currency bonds issued in dollars this time consist of two bonds: $500 million with a 3-year maturity and $300 million with a 5-year maturity.

LG Electronics received investment orders amounting to approximately $9.4 billion, about 12 times the issuance size, from a total of 339 institutions based on the maximum order book.

The spread was set at 95 basis points (1bp = 0.01 percentage points) and 110 basis points above the U.S. Treasury yield of the same maturity for the 3-year and 5-year bonds, respectively. This is 40 basis points lower than the initially offered rates of 135bp for the 3-year bond and 150bp for the 5-year bond. This result was driven by the successful demand forecast. The new issue premium (NIP), a premium paid on the newly issued bond volume, was also lowered to a negative value of -5bp.

Despite recent setbacks in U.S. interest rate cuts and increased global volatility, LG Electronics' strong performance and solid financial stability were recognized by global investment institutions.

LG Electronics plans to use the funds raised through the foreign currency bond issuance to strengthen future competitiveness through research and development (R&D) and facility investments aimed at achieving the '2030 Future Vision' announced last year.

The 5-year sustainable bonds will be used for eco-friendly and social projects, including green buildings.

This foreign currency bond issuance was led by BNP Paribas, Citigroup, HSBC, JP Morgan, Korea Development Bank, and Standard Chartered Bank. LG Electronics received credit ratings of Baa2 (stable) from Moody’s and BBB (stable) from Standard & Poor’s (S&P).