SKT raises $500m to refinance debt
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SK Telecom has raised $500 million in offshore private loans to help refinance existing debt and secure enough capital to weather a destabilized global economy.
The company has issued five-year loans at a coupon rate of 3.75% after holding financial roadshows across Asia, the US and Europe, receiving favorable responses from around 60 global bond investors.
Despite the impact of the recent US-China trade war on the global financial market, SK Telecom managed to draw a positive response from global investors due to its high credit rating, stable cash flow and strong growth potential, the company said in a statement.
The offer was around seven times oversubscribed from SK Telecom’s estimated bond issuance of $500 million, and the final interest rate was set at 22.5 basis points lower than the initially proposed level.
“Diversifying the loan maturity structure is expected to improve the company’s financial structure,” SK Telecom said in a statement.
Questions & Answers
Q.Why did SK Telecom seek these offshore private loans?
Why did SK Telecom seek these offshore private loans?
The company raised the funds to help refinance its existing debt obligations. It also aims to secure sufficient capital to manage through the current global economic instability.
Q.What was the final interest rate achieved for these five-year loans?
What was the final interest rate achieved for these five-year loans?
The loans were issued at a coupon rate of 3.75%. This was 22.5 basis points lower than the interest rate initially proposed by the company.
Q.How did SK Telecom attract such strong interest from global investors?
How did SK Telecom attract such strong interest from global investors?
The company drew a positive response due to its high credit rating, stable cash flow, and strong growth potential. This was despite the recent impact of the US-China trade war.
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