SK hynix Prepares 3 Trillion Won Bond Investment
SK hynix plans to deploy 3 trillion won into the domestic bond market. The company is shifting from securities firms to six asset managers to reduce market visibility. This move aims to stabilize yields while expanding the trading base.
SK hynix plans to invest 3 trillion won in the domestic bond market. This amount equals 2.24 billion US dollars. The company sent requests for proposals to six asset managers on September 10.
The firms selected are NH-Amundi, KB, Shinhan, Woori, Mirae Asset, and Korea Investment Management. SK hynix intends to allocate 500 billion won to each entity. This structure replaces the previous use of securities firm wrap accounts.
Strategic Shift to Mandate-Based Management
SK hynix previously used trust services at securities firms. It suspended these investments in early August. The company is now adopting a discretionary mandate model.
Market participants note that large orders via a single broker reveal investor identity quickly. This transparency can impact bond prices negatively. Distributing funds across multiple managers reduces this visibility.
This is the first time SK hynix has used this method. Industry sources describe the move as a test case. It aims to minimize the impact on market prices.
Targeting High-Grade Credit Card Bonds
The primary investment targets are high-grade card bonds. These instruments carry credit ratings of AA0 or higher. Issuers include KB Kookmin Card, Shinhan Card, Hana Card, and Woori Card.
The target maturity range is three to four years. Previous guidelines limited maturities to three years. The new approach may expand the eligible timeframe to four years.
Market Impact and Yield Stabilization
Bond market experts view this inflow as a positive factor. It will help stabilize supply and demand for credit finance company bonds. The funds may limit upward pressure on yields.
A bond broker at a securities firm noted the impact will differ from past investments. Yields may not drop as sharply as before. However, the overall stabilizing effect could be significant.
