South Korea’s second-largest wireless carrier KT Corporation returned to the US dollar bond market as it priced on August 1 a US$500 million offering that attracted strong demand.
The three-year Reg S/144A deal was priced at 125bp over the US treasuries and will pay a semi-annual coupon of 4% per annum. The spread was in line with the final price guidance and 30bp inside the initial price range of the 155bp area.
The transaction was executed following the conclusion of global investor calls on July 29. It generated a final order book of over US$2.5 billion from 163 accounts. In terms of geographical distribution, 63% of the bonds are distributed in the Asia-Pacific region, 30% in the US and 7% in the Europe, Middle East and Africa region.
By type of investors, asset and fund managers accounted for 63% of the paper, banks 17%, insurance companies and pension funds 16%, sovereign wealth funds and sovereigns, supranationals and agencies 2%, and private banks 2%.
The net proceeds from the offering are earmarked for general corporate purposes, including the prepayment of the company’s existing indebtedness. BNP Paribas, Citi, Crédit Agricole CIB, HSBC and J.P. Morgan acted as the joint bookrunners and lead managers for the offering.
KT Corporation previously tapped the US dollar bond market in July 2021 when it printed a US$300 million deal for 5.5 years.
Fitch Ratings, which assigned an A rating to the latest bond offering, expects the positive momentum for KT Corporation to continue in the short-term as increasing 5G penetration and growing data consumption by subscribers support its wireless business segment. Fitch forecasts that contributions from media segments – in particular, internet protocol television and content – will continue to rise, providing strong growth to the company’s revenue.