Lee & Ko, Bae Kim & Lee, Paul Hastings and Linklaters have advised on HD Korea Shipbuilding & Offshore Engineering’s (KSOE) KRW2.37 trillion (USD1.55 billion) zero-coupon exchangeable bond issuance due 2031, the largest such offering by an Asian issuer in 2026.
The bonds, which were listed on Singapore Exchange Securities Trading, are exchangeable into common shares of HD Hyundai Heavy Industries. The transaction was completed in line with Regulation S of the US Securities Act of 1933.
Lee & Ko served as KSOE’s Korean counsel, with the team consisting of partners Seunga Hyun and Hyunjoo Oh, as well as associates Tae Hwan Jeon and Jin Hyun Choi.
“In addition to examining standard transaction structures, foreign exchange issues and issuing legal opinions, we conducted a broad review of the relevant legal and regulatory requirements applicable to offshore exchangeable bond issuances, including the Korean Commercial Act, the Financial Investment Services and Capital Markets Act, the Foreign Exchange Transactions Act and Korea Exchange disclosure rules,” Hyun told Asia Business Law Journal.
“We also assessed the legality and feasibility of the issuance structure from multiple perspectives.”
He added that adhering to a tight deadline proved to be the most difficult part of the transaction.
“The most challenging aspect was ensuring full compliance with complex disclosure obligations within a highly compressed timeline. Key disclosures, including material event reports, management disclosures, pre-disclosure requirements for insider trading, and major shareholding reports (5% filings), all had to be completed in line with the issuance schedule,” he said.
Given the nature of the transaction, Hyun said that “it is likely to serve as a reference point for future offshore capital markets transactions by major Korean corporates”.
Paul Hastings acted as KSOE’s international counsel, led by corporate partner Iksoo Kim.
HSBC, JP Morgan Securities and UBS’s Hong Kong branch were the joint global co-ordinators, joint lead managers and joint bookrunners.
Bae Kim & Lee acted as the managers’ Korean counsel. The team comprised partners Hee-Gang Shin, Youngjin Ha and Yelim Hyon, as well as senior foreign attorney Heesug Chung.
“In addition to reviewing standard transaction structures, foreign exchange issues and issuing legal opinions, the firm also took a leading advisory role on a range of compliance matters under Korean law,” Shin told ABLJ.
Linklaters served as the managers’ international counsel.
The bonds will be used to fund KSOE’s global investments, support overseas operations and meet working capital needs for high-value-added, eco-friendly marine equipment businesses. It will further be used for general corporate purposes.
The transaction was announced on 31 March 2026 and closed on 4 May 2026.