Hyundai E&C successfully prices W500b convertible bond

Hyundai Engineering & Construction said Tuesday it had successfully completed the issuance of a 500 billion won ($326 million) convertible bond.

The bond was issued with a zero coupon rate, zero yield to maturity and a five-year term — conditions the company described as exceptionally favorable by recent capital market standards. The conversion price was set at 150,607 won, reflecting a 15 percent premium over the share price at the time of the board resolution. The effective conversion premium widened further after the share price fell following the conversion price determination.

In the convertible bond market, a high premium and the absence of a refixing clause are typically seen as factors that reduce investment appeal. Despite those conditions, strong participation by multiple institutional investors signals broad market confidence in Hyundai E&C's credit quality and expectations for future growth in corporate value, some analysts say.

The bond was issued without a put option or refixing clause — provisions normally granted to investors — giving the company greater stability in managing the proceeds. The structure allows Hyundai E&C to deploy the funds for at least five years without bearing any interest cost.

The company plans to use the capital raised to strengthen its financial stability and accelerate its medium- to long-term credit competitiveness.

"This successful convertible bond issuance confirms the market's trust in Hyundai E&C's future growth strategy and financial soundness," said Lee Hyeong-seok, the company's chief financial officer. "We will strategically deploy the funds in future growth projects — including nuclear power plants and small modular reactors — while building long-term corporate value on the foundation of a stable financial structure and strong credit competitiveness."

Meanwhile, Hyundai E&C is expanding its business portfolio to include large-scale nuclear power, SMRs, offshore wind and solar energy as it builds an energy-focused portfolio.