On Tuesday, POSCO announced that it successfully issued 700 million USD in global bonds on Monday, comprising 400 million USD in five-year notes and 300 million USD in ten-year notes.
POSCO initially marketed the bonds at a spread of 1.15 percentage points over comparable U.S. Treasuries for the five-year bonds and 1.30 percentage points for the ten-year bonds.
The offering drew significant interest from around the world. More than 180 institutional investors worldwide placed orders totaling 6.6 billion USD, oversubscribing the issue by more than nine times. Asian investors accounted for 67% of the demand, followed by Europe and the Middle East at 18%, and the United States at 15%.
Due to the robust demand, POSCO tightened the final spread by 0.4 percentage points each, to 0.75 percentage points for five-year notes and 0.90 percentage points for ten-year notes. The coupon rates were set at 4.5% for the five-year bonds and 5.0% for the ten-year bonds.
POSCO’s strong financial position was reflected in the ratings assigned by international credit agencies. Moody’s rated the bonds Baa1, while Standard & Poor’s (S&P) assigned an A-‘ rating.
In preparation for this bond issuance, POSCO conducted an extensive investor outreach program. Last November, the company held 16 investor meetings across New York, Boston, and London. This month, it expanded its efforts to Asia, presenting to 57 major investment institutions in Taiwan, Hong Kong, and Singapore.
A POSCO spokesperson stated, “The funds raised through this bond issuance will be utilized to refinance existing debt obligations.”
