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LG Chem raising $2 billion in exchangeable bonds
Global Banking & Finance Review®
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SEOUL (Reuters) – South Korea’s LG Chem Ltd is raising $2 billion in bonds that will exchange for LG Energy Solution Ltd shares, according to a regulatory filing on Tuesday.
SEOUL (Reuters) – South Korea’s LG Chem Ltd is raising $2 billion in bonds that will exchange for LG Energy Solution Ltd shares, according to a regulatory filing on Tuesday.
The bonds will be sold in five and seven year tranches, the company said, raising $1 billion each.
The five-year bond has a coupon range of 0.75% to 1.25% while the longer dated bond has 1.35% to 1.85% range, according to the filing.
LG Chem said it plans to use the newly raised $2 billion to finance its facility investment and operations for businesses, including battery-related materials and drug developments.
The bonds will be exchangeable into common shares of LG Energy Solution.
(Reporting by Scott Murdoch in Sydney and Heekyong Yang in Seoul; Editing by Himani Sarkar and Louise Heavens)
An exchangeable bond is a type of bond that can be converted into shares of another company, allowing investors to benefit from potential stock price appreciation.
Corporate bonds are debt securities issued by companies to raise capital. Investors receive periodic interest payments and the return of principal at maturity.
The coupon rate is the interest rate that a bond issuer pays to bondholders, typically expressed as a percentage of the bond's face value.
Raising capital allows companies to fund operations, invest in new projects, and support growth initiatives, enhancing their overall business strategy.
Bond tranches are segments of a bond issuance that have different maturities or risk profiles, allowing investors to choose based on their investment preferences.
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