Lotte Engineering & Construction successfully issues AAA-rated construction payment ABS 3,000hundred million won
Lotte Engineering & Construction has issued AAA-rated asset-backed securities (ABS) based on construction payment receivables nearing completion, amounting to 3,000hundred million won. The company says the successful short-term financing will bring forward the timing of cash recovery.
Lotte Engineering & Construction said it issued AAA-rated asset-backed securities (ABS) amounting to 7hundred million won, backed by construction payment receivables generated at projects nearing completion and at projects of group affiliates.3,000The issuance was intended to secure short-term financing.
The issuance consisted of two tranches of 1,500hundred million won each. Their maturities are 1 years and 1 years and 3 months, respectively.
KB Securities, Hana Securities, Kiwoom Securities, Samsung Securities, and Korea Investment & Securities, among others, participated in the underwriting syndicate.
This ABS is a follow-on issuance that secured demand under the same structure as the ABS issued in the previous 5month, following the 1ABS. The company explained that stability was enhanced by including not only housing project sites but also construction payment receivables from affiliates among the underlying assets.
It was reported that the company raised funds at interest rates lower than those implied by its standalone credit rating by enhancing its creditworthiness through credit support from financial institutions and other measures.
Lotte Engineering & Construction said it expects this ABS to improve cash flow by bringing forward the timing of construction payment collections. The company expects to recover approximately 2027funds early by the 1quarter of 7,700worth one hundred million won.
Regarding the company's performance, operating profit for the 1quarter this year was 504hundred million won, an increase from the same period a year earlier. The report also mentioned contingent liabilities related to PF.