BY BLOOMBERG NEWS – JUNE 7, 2022
Korea Electric Power Corp. (Kepco) is looking to raise even more funds in the face of ballooning losses due to surging fuel costs.
The monopoly power distributor in South Korea is offering dollar-denominated green bonds in two parts, according to a person familiar with the matter on Tuesday.
The company finds itself in a bind due to surging fuel costs that it cannot pass on to consumers. S&P Global Ratings recently downgraded Kepco’s stand-alone credit profile to reflect likely operating losses in 2022 and 2023.
“Its dollar bond plan shows it still has some cards,” said Jeong Dae-ho, a credit analyst at KB Securities Co. “While spreads on its won bonds may widen a bit more in the second half, they will stabilize somewhat.”
Despite the lowered view, S&P affirmed Kepco’s AA rating given government support for Kepco was almost certain.
As part of their efforts to stem the tide, Kepco officials held an emergency meeting last month at which potential asset sales were on the agenda. The power company has also already issued a record amount of won notes this year.
Along with accelerating inflation and a hawkish central bank, that surge of supply contributed to worsening of local credit market sentiment. Kepco last sold a dollar note in September, when it priced $300 million of green debt. Bloomberg News
