SK Telecom (CEO Shin Bae Kim, www.sktelecom.com) issued non-guaranteed global bonds with a maturity of 20 years. The public offering bond will be priced at 400 million dollars. 

SK Telecom CFO Seong Min Ha held a ceremony in New York on June 13th (Korean Standard Time) to celebrate issuance of the global bonds with heads of co-underwriters including Representative from Credit Suisse Cheon Ki Lee, Representative from Merrill Lynch Seong Eun An, and Representative from Morgan Stanley Jae Wook Rhew. The interest rate of the new bonds will be 155bp higher than 30-year Treasury Bonds issued by U.S. Department of the Treasury.

SK Telecom said that the purpose of the bond issuance is to put additional investment into its ventures in the U.S. and Vietnam and to cover general expenses in overseas operation such as commissions charged for global roaming. 

Initially, SK Telecom planned to issue 10-year and 20-year bonds priced at 200 million dollars respectively. However, with the 20-year bond drew as much as 840 million dollars from 42 international investment institutions, which is about 4 times greater than the planned volume, the company decided to extend the maturity of the 10-year bond to 20 years. The high interest of foreign institutions is considered very encouraging, particularly given the recent slump in the international bond market.

SK Telecom became the first Korean company to re-issue global bonds after the sub-prime mortgage crises put a halt to bond issuance in the international market in late June 2007. As SK Telecom successfully issued 20-year long-term public offering bonds for the first time as a private Korean company, the international credibility of Korean companies is expected to be enhanced in general.  

The success is largely attributable to SK Telecom’s high credit ratings and favorable acknowledgement by the market. World’s leading credit rating agencies including Moody’s and Standard & Poor’s affirmed A or A2 ratings to SK Telecom, which is same as or even higher than the sovereign rating of Korea, reflecting the sound financial status and management results of the company. Additionally, SK Telecom’s strong growth potential and increased transparency from non-executive director system are highly recognized by the international market.