On June 18, MG Capital announced the issuance of $50 million in foreign currency private placement floating-rate bonds. This marks the company's inaugural foreign currency fundraising effort. The bonds, structured as a single tranche with a two-year maturity, have an interest rate set at the secured overnight financing rate (SOFR) plus 80 basis points. KDB Asia acted as the lead manager, with the Korea Development Bank participating as the guarantor.
Unlike banks, capital companies do not have deposit-taking functions, such as savings accounts, and must rely on marketable funds like corporate bonds and loans to expand their operating assets. Therefore, diversifying funding sources is considered a key challenge for stable growth.
MG Capital expects that this foreign currency funding will enhance its liquidity management capabilities and provide stability for asset growth. In particular, amid rising domestic interest rates, securing funds at a lower rate than domestic public bonds is anticipated to help reduce funding costs and improve profitability.
Since being acquired by the Saemaul Geumgo Central Association in February last year, MG Capital has continued to grow its assets. The $50 million raised will be utilized as operating funds to further expand its growth base.
An MG Capital representative stated, "We believe this bond issuance sends a positive signal to domestic credit rating agencies and institutional investors by diversifying our funding sources. Based on this, we plan to focus our efforts on establishing a stable funding system."
* This article has been translated by AI.
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