POSCO Holdings Inc.’s PKX subsidiary POSCO International Corporation has issued its first-ever global bond, raising $500 million in a five-year offering and marking its debut in the international capital markets.
The single-tranche bond was priced at 90 basis points over the five-year U.S. Treasury yield, tightening 30 basis points from the initial price guidance after attracting strong investor demand. The offering was four times oversubscribed, with total orders reaching approximately $2 billion, despite heightened volatility in global financial markets stemming from recent geopolitical tensions in the Middle East.
POSCO conducted investor presentations and conference calls with major institutional investors across the United States, Europe and Asia before the issuance. The company highlighted its diversified portfolio spanning energy, materials and agro businesses, its stable earnings base and its position as a core affiliate of the POSCO Group. Investors also showed strong interest in the company’s growth strategy, including the expansion of Senex Energy’s LNG production capacity in Australia and the continued growth of its Indonesian palm oil subsidiary, PT PAR.
The proceeds from the bond issuance will be used to repay existing foreign-currency borrowings and for general corporate purposes, thereby strengthening the company’s funding flexibility.
Asian investors accounted for 67% of allocations, followed by the United States at 27% and Europe at 6%. By investor type, asset managers represented 65%, banks 33% and other investors 2%.
The transaction was jointly managed by BNP Paribas, Citi, Crédit Agricole, HSBC, Mizuho and Korea Development Bank. The U.S. dollar bonds received investment-grade ratings of BBB from S&P and Baa2 from Moody’s.
POSCO said the successful issuance reflects global investors’ recognition of its business competitiveness and long-term growth potential. The company plans to further diversify its funding sources, expand its overseas investor base and strengthen its growth platform across its energy, materials and agro businesses.
Shares of PKX have lost 12.2% in the past year compared with the industry’s 10.4% decline.
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PKX Zacks Rank & Key Picks
PKX currently carries a Zacks Rank #3 (Hold).
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