This article appeared on Signal, a capital markets compass, at 11:01 a.m. on June 10, 2026.
Hanwha Aerospace’s K9 self-propelled howitzer. Hanwha Aerospace
Hanwha Aerospace (012450.KS) will issue foreign currency-denominated bonds worth at least $500 million (about 750 billion won) to global investors for the first time in its history. The move is seen as an effort to accelerate its push into the global defense market, as the company executes trillion-won investments to build a Modular Charge System (MCS) smart factory in the United States.
According to the investment banking (IB) industry on Tuesday, Hanwha Aerospace plans to issue the foreign currency bonds by August. The company previously issued floating-rate notes (FRN) worth 90 billion won and 140 billion won in 2023 and 2024, respectively. This time, however, it has set a fundraising plan of at least 750 billion won targeting investment institutions in Asia, Europe and the United States.
The backdrop to the large-scale foreign currency bond issuance is closely tied to the goal of expanding its influence in the US defense market, sources said. The company’s main product is 155mm ammunition. Three years ago, it developed the MCS, a global standard specification, which opened the door to previously blocked exports and accelerated its push into the US defense market. In particular, as the company has decided to invest 1.3722 trillion won in building the US MCS smart factory, raising dollars directly from local investors is expected to be more convenient.
Having completed a 4 trillion won rights offering last year alone, the company also has ample capacity to take on additional debt. According to Korea Ratings, Hanwha Aerospace’s debt-to-equity ratio fell from 332.7% at the end of March 2025 to 221.4% at the end of December. Its first-quarter consolidated net profit this year (526.3 billion won) surpassed the highest level in the past five years, raising expectations of a capital expansion effect driven by strong business performance.
The IB industry expects Hanwha Aerospace to issue the foreign currency bonds with its own credit rating rather than a financial institution’s guarantee. To raise funds in the global bond market, a company must secure a credit rating from at least two of Moody’s, Standard & Poor’s (S&P) and Fitch. Hanwha Aerospace received a ‘BB+’ rating, which corresponds to speculative grade, from Fitch in 2024, but currently has no valid rating.
Hanwha Aerospace has held meetings with Moody’s and S&P since last year and completed preparations to obtain a credit rating. Many expect a rating of ‘Baa3’ or higher, which corresponds to investment grade, as its financial stability has improved compared with the past.
However, analysts say the possibility that the fundraising schedule could be pushed back cannot be ruled out following a recent explosion at the Daejeon plant. A roadshow targeting global investors had been planned ahead of the foreign currency bond issuance, but it was reportedly canceled entirely after the accident.