LG set to fund OLED plant expansion with over $400 mn in new bonds
Hyunil Lee
Sep 07, 2021 (Gmt+09:00)
LG Display Co. will likely raise around 500 billion ($430 million) in new bond issues, more than its planned 300 billion won, to finance the expansion of its organic light-emitting diode (OLED) panel production lines in South Korea, according to investment banking sources on Tuesday.
The new issues drew 1.2 trillion won in bids, four times its target amount. The three-year bond attracted bids worth 805 billion won, far higher than the planned 200 billion won. Bids for the five-year note amounted to 415 billion won, above the planned 100 billion won.
They will be labeled green bonds, environmental, social and governance-themed notes, because they will be pumped into eco-friendly production facilities. The bonds carry an A+ rating with a positive outlook from one of the country's two leading rating agencies.
To raise a more-than-expected 500 billion won through the new issues, LG Display is understood to offer slightly higher rates than 2.7% and 3.2%, respectively, for three- and five-year bonds.
In comparison, the yields on South Korea's three- and five-year treasury bonds are quoted at 1.46% and 1.72%, respectively.
The bond issuance comes after the company in August announced a plan to double its small-panel production capacity at its Paju OLED plant to 60,000 units a month to narrow its gap with segment leader Samsung Display Co.