Daehan Electric Wire Sees Strong Bond Demand, Expands Issuance to Record 155 Billion Won

Issuance Increased to 155 Billion Won
Purchase Orders Reach 888 Billion Won in Book-Building
Funds to Be Used for Debt Repayment and Operating Capital

On September 12, Daehan Electric Wire announced through a public disclosure that it would increase the size of its corporate bond issuance to 155 billion won, thanks to strong demand in its bond book-building process. This is nearly double the original target amount of 80 billion won and effectively reaches the maximum issuance limit.

In the bond demand forecast conducted on September 10, Daehan Electric Wire secured purchase orders totaling 888 billion won, more than 11 times the target amount. For the 2-year maturity tranche, 31.1 billion won in subscriptions were received for the 30 billion won offering, and for the 3-year maturity tranche, 57.7 billion won in subscriptions were received for the 50 billion won offering, reflecting high investor interest.

The company also significantly lowered the issuance interest rates. Compared to the average market interest rate for bonds with the same credit rating, the 2-year bonds were priced 35 basis points (1bp=0.01 percentage point) lower, while the 3-year bonds were priced 55 basis points lower. Of the funds raised, Daehan Electric Wire plans to use 30 billion won for debt repayment and 125 billion won for operating capital.

Exterior view of Daehan Electric Wire Dangjin Cable Factory. Daehan Electric Wire.

In the first half of this year, Daehan Electric Wire posted sales of 1.7718 trillion won, achieving a record high and marking a 7.2% increase compared to the same period last year. As of the end of August, the company's order backlog reached an all-time high of 3.25 trillion won. This is approximately 3.5 times greater than the 945.5 billion won recorded at the end of 2020, just before the company was acquired by Hoban Group.

The global power infrastructure market is expected to continue growing due to the expansion of artificial intelligence (AI) and increasing demands for carbon neutrality. In response, Daehan Electric Wire is rapidly strengthening its turnkey capabilities, covering everything from submarine cable production to installation, and has decided to invest in building a factory to produce HVDC (high-voltage direct current) submarine cables, further expanding its investments.

A Daehan Electric Wire representative stated, "Taking into account the strong investment demand, we have expanded the corporate bond issuance to its effective maximum. We will further solidify our position as a leading company in the global power infrastructure market by enhancing our financial soundness and boosting the competitiveness of our ongoing businesses, thereby increasing corporate value."