Mirae Asset to sell up to $600 mn global debt for investment

  • 2020-03-07

Mirae Asset Daewoo Co. Ltd. plans to issue a global bond worth $500 million to $600 million as early as April for the third year of offshore debt sale in a row to fund investments.

The biggest South Korean brokerage firm by equity capital has recently picked a number of banks to kick off the bond issuance, according to investment banking sources on March 6.

If the debt sale is completed, it will raise up to 1.6 trillion won ($1.3 billion) through bond issuance during the first four months of this year, on track to match the 1.7 trillion won it had secured for full-year 2019 through bond sales at home and abroad last year.

The amount of capital it raised through debts in 2019 was the largest among top securities companies in South Korea.

Details about the terms of the new bond were not immediately available.

In January and February this year, Mirae Asset Daewoo had raised a combined 1 trillion won from won-denominated bond sales, including a six-year subordinated note of 500 billion won.

The company has been at the forefront of global investments by its parent group, including a $5.8 billion purchase of a 15 US luxury hotel portfolio from China’s Anbang Insurance Group in 2019.

Investment assets at the brokerage firm climbed to 7.5 trillion won at the end of 2019, from 6.2 trillion won a year before.

As the parent group ramped up overseas investment, Mirae Asset Daewoo became the first Korean brokerage company to issue a global debt with a dollar-denominated bond sale for $300 million in 2018.

In 2019, it also raised $600 million in global bond sale with three and five-year terms.

The upcoming bond sale follows a report by the domestic media Bell in February that Mirae Asset has sharply scaled back the sell-down target of its 1.8 trillion won equity interests in the 15 US hotel portfolio to 500 billion won, failing to spur interest from domestic investors in the economy-sensitive assets.

The investment involved 2.5 trillion won equity interests funded by Mirae Asset Daewoo and its affiliates.

Because of the reduced sell-down of overseas properties, the report added that Mirae Asset Group called on its unit companies to curb new investmensts.

Other major investments by Mirae Asset Daewoo in 2019 include an equity stake in the $1 billion joint acquisition of Tour Majunga in France and a $243 million mezzanine loan on a Hong Kong office building.

It has also put up 490 billion won for the Asiana Airlines acquisition by a consortium led by Hyundai Development Company early this year.

Hit by aggressive overseas investments, its net capital ratio dropped to 1,770% at the end of 2019, from 2,386% at the end of 2017.

But net profits rose by 43.7% to 663.7 billion won in 2019, bolstered by fee incomes from investment banking and trading of equity-linked and fixed income securities.

Domestic rival Korea Investment & Securities Co. Ltd. posted the biggest earnings of 709.9 billion won among domestic brokerage companies in 2019.

By Jinsung Kim


<Edited by Yeonhee Kim>