POSCO E&C Issues 400 Billion KRW in Hybrid Capital Securities... "Entire Amount for Debt Repayment"

POSCO E&C (CEO Song Chi-young) announced on the 14th that it will issue hybrid capital securities (perpetual bonds) worth a total of 400 billion KRW through a private placement for the purpose of strengthening financial soundness.

The securities issued this time are the 1st unregistered, coupon-bearing, unsecured bond-type hybrid capital securities, with the subscription and payment date set for July 20, 2026. POSCO E&C stated that it plans to use the entire 400 billion KRW raised to repay existing debt. Hybrid capital securities can be recognized as capital in accounting, which has the effect of improving the financial structure.

The maturity date of the bond is set for July 20, 2056, which is 30 years later, but the maturity can be extended without limit on the number of times at the discretion of the issuing company, POSCO E&C. Interest will be paid in arrears every three months, and a condition is included that allows the company to defer interest payments (cumulative deferral) at its discretion.

Conditions for early repayment (call option) and interest rate step-up are also granted. POSCO E&C can repay the entire bond before maturity starting from July 20, 2029 (the first call option exercise date), which is three years from the issuance date.

The initial interest rate is determined by adding 1.20% per annum to the yield of the 3-year individual private bond valuation. However, starting from July 20, 2029, three years after issuance, an additional 2.0% per annum will be added to the base rate, and a step-up clause will be applied where the additional margin expands every year thereafter, reaching an additional 4.0% per annum from July 20, 2033 (the 5th reset date).

This 400 billion KRW private placement bond will be fully underwritten by specific institutional investors and special purpose companies (SPCs). The allocation details are ▲BK Plus 2nd (140 billion KRW) ▲New Star Poha 1st (90 billion KRW) ▲KIS Plus 41st (60 billion KRW) ▲KIS Plus 42nd (50 billion KRW) ▲Korea Investment & Securities (30 billion KRW) ▲S On A (30 billion KRW). The board of directors' resolution was held earlier on the 13th.