Kepco looks to foreign bonds for cash

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Kepco looks to foreign bonds for cash

Korea Electric Power Corporation (Kepco), the country’s monopoly electricity distributor, is considering raising as much as $800 million this year via foreign-currency bond sales, proceeds of which would be used for overseas projects and acquisitions.

The Seoul-based state utility plans on selling debt offshore after it didn’t issue any such notes last year, it said.

Several of its units, including Korean Western Power and Korea Hydro & Nuclear Power, issued U.S. dollar bonds last year.

The $800 million Kepco plans to borrow offshore in 2013 will be the most since 2010, when its note sales in the U.S. currency totaled $1.1 billion.

Kepco didn’t specify which currencies its sales might be in this year, according to the e-mail.

Kepco, facing limited growth prospects at home, is building 11 power-generation projects outside of Korea at a cost of $1.2 billion, according a Nov. 21 company filing.

The company had its credit rating raised one level to A+, the fifth-highest investment grade, by Standard & Poor’s on Sept. 17.

Kepco has $350 million of 20-year 7.75-percent securities maturing April 1, data compiled by Bloomberg show.

The notes, issued at 99.353 cents on the dollar in 1993, were trading at 101.071 cents to yield 1.379 percent yesterday.

A decision on whether to borrow in local currency or foreign currency, and then swap the proceeds into Korean won, will be made no later than mid-February, according to a company official who asked not to be named.

There was no need to sell foreign-currency debt last year as the company’s reserves from overseas projects matched demand in the absence of any major offshore acquisitions, that official said.

The company plans to sell as much as 6.1 trillion won of bonds at home this year. Bloomberg
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