Korea Post has invested $60 million in a seven-year private debt fund to provide a senior loan secured on four US gas-fired power plants, but the investment was just half of what it had planned because of competition, according to a South Korean media report.
The state-run agency is the only South Korean investor in the 400 billion won ($370 million) financing package provided for the gas power facilities in Colorado, including one in Springdale, online news provider edaily reported on Dec. 20, citing investment banking sources.
The expected yield from the investment is between 4.5% and 4.7%.
According to the report, the financing package had attracted a great number of investors from around the world because of their locations, and thus Korea Post had to scale back its investment. With the plants already in operation, they are also seen as safe investment.
It did not give further details about who is running the private debt fund and which other investors have participated, nor the names of the power plants involved in the financing package.
Senior debts backed by US infrastructure facilities have been appealing to a broader pool of institutional investors in search of low-risk, long-term assets.
South Korean investors provided $440 million in debt financing for the construction of a new US gas power plant in Maryland this year, in their largest investment in a US power plant.
<Edited by Yeonhee Kim>