Wednesday to close at W95,300. The stock
has fallen 12.25% year to date.
There is a 90-day lock-up period on the
vendor.
UBS is the sole bookrunner.
› COWAY RAISES W311BN FROM BLOCK
Coway Holdings has priced a block trade in
Korean water purifier maker COWAY at the
bottom of an indicative price range to raise
W311bn, according to a person close to the
transaction.
Around 3.69m shares, representing
5% of the total outstanding, were sold at
W84,400 versus an indicative price range
of W84,400–W87,200. The price translates
into a 7% discount to the pre-deal close of
W90,800.
“The deal is well over-subscribed, and
the allocation was very concentrated”, the
person said.
Long-only and sovereign funds have
taken one-third of the offering, with the
top 10 investors backing about 80% of the
deal.
There is a six–month lock-up on the
vendor.
Goldman Sachs is the sole bookrunner.
› KYOBO LIFE PLANS US$1BN IPO
KYOBO LIFE, South Korea’s third-largest life
insurer by assets, is targeting a Korea
Exchange IPO of about US$1bn in the first
half of next year, people with knowledge
of the transaction said.
NH Securities and Credit Suisse have been
mandated to work on the float.
Kyobo Life first revealed its intention
to go public in March last year, according
to local media reports that cited the
company’s management. The reports didn’t
give details on the timing or fundraising
size.
The company posted 2017 net income
of W611bn on operating revenues of
W13.4tn. It had annual premiums received
of W11.6bn, according to the income
statement available on the company’s
website.
Chairman Chang-jae Shin is the largest
shareholder in Kyobo Life with a 33.78%
stake. His holdings in the company stand
at 39.43% after taking into consideration
the shares owned by his family members,
according to the website. Kyobo Life was
founded by Shin’s father in 1958 as Daehan
Kyoyuk Insurance.
In 2012, a consortium of investors bought
a 24% stake in Kyobo Life at W1.2trn from
Posco Daewoo. The consortium was led
by private equity fund Affinity Equity
with buyers including the Government of
Singapore Investment Corp, Baring Private
Equity Asia and South Korea’s IMM Private
Equity.
Kyobo Life did not respond to an email
from IFR seeking comment on the IPO
plan.› SAMSUNG HOLDERS CLEAN UP C&T STAKESTwo Samsung shareholders have priced a
block in Korea’s SAMSUNG C&T CORPORATION at
the top of an indicative price range to raise
W929bn.
Samsung Electro-Mechanics Company
and Samsung Fire & Marine Insurance
Company offloaded their entire stakes in
Samsung C&T through the block trade,
cleaning up circular shareholdings that
had attracted criticism from South Korean
regulators.
Semco and SF&M owned 2.64% and
1.38% of Samsung C&T, respectively,
before the transaction. They sold around
7.6m shares at W122,000 versus an
indicative price range of W118,000–W122,000. The price translates into a
5.1% discount to the pre-deal close of
W128,500.
The book was multiple times covered
with a good mix of hedge funds and long-
only investors participating, according to a
person close to the deal.
Shares of Samsung C&T opened at
W125,500 before trading up 1.95% at
W129,500 last Friday morning.
Samsung C&T’s stock has recovered
from a multi-year low in July, having
come under pressure from a regulatory
probe into the IPO of Samsung Biologics
and government pressure to unwind
cross-shareholdings that have allowed
the controlling family to maintain close
control over the group.
Samsung SDI, another group company,
sold its shares in Samsung C&T in April
through a W582bn block trade.
Samsung C&T declined to comment.
Citigroup, Credit Suisse and Morgan Stanley
were the joint bookrunners.Hanwha General pulls Tier 2
Bonds Deal withdrawn as investors question Korean insurance regimeHANWHA GENERAL INSURANCE on Thursday pulled
a US dollar subordinated Tier 2 bond, three
bankers close to the deal and a company
official told IFR.
Marketing for the 10-year non-call five
began at initial price guidance of 5.5% area,
but the issuer gathered little momentum and
final guidance was left unchanged from that
level.
A banker at one of the leads said demand
was not sufficient to price the trade, adding
that the issuer may be able to try again in
October or November.
“Investors thought that the pricing was too
expensive for a Single A name in the market,”
he said.
Hanwha General Insurance is rated
A2/A/A, and the 10-year non-call five had
an initial rating of A– from S&P. Coupons
were to be non-deferrable, with regulatory
recognition to reduce by 20% per annum
after the first call date.
“Korean insurers got too spoiled by the
previous deals,” said an investor, citing
similar offerings last year at much lower
yields.
The lead manager denied an earlier IFR
report that there were problems with the
documentation. However, a second investor
cited concerns over how insurance capital
securities will be affected once Korea adopts
a new accounting treatment.The investor suggested that local
regulators should make an effort to boost
international investor confidence in this
sector, which will see more issuance as
Korean insurers boost risk-based capital
levels under the implementation of
International Financial Reporting Standard 17
Insurance Contracts.
IFRS17 will require insurers to report
liabilities on a mark-to-market basis rather
than book value, resulting in a larger amount
of recorded liabilities.
“The deal did not have an investor put if
regulations change. Without that, that could
be an important deterrent to investors,” the
second investor said.
A company official said that the bond had
not priced, but declined to comment further.
Citigroup, Credit Agricole and JP Morgan
were joint bookrunners.
KDB Life remains the only Korean insurer
to have priced a US dollar bond this year,
issuing a US$200m perpetual non-call five
at 7.5%.
“Demand for Korean insurance sub debt
has been tepid, to say the least, as evidenced
by the undemanding valuations on the
existing T1s,” Nomura wrote in a note.
“More T1/T2 supply is likely as Korean
insurers bolster their capital positions ahead
of IFRS 17 implementation in 2021.”
FRANCES YOON