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[Alpha Biz=(Chicago) Reporter Paul Lee] Hotel Lotte (AA-) has met its target amount in forecasting corporate bond demand. However, we failed to issue under.
According to the financial investment industry on the 1st, Hotel Lotte made a demand forecast for a total of 120 billion won, including 40 billion won for two years and 80 billion won for three years, and received a total of 637 billion won in orders. Orders of 324 billion won were received for two-year products and 313 billion won for three-year products, respectively.
Hotel Lotte offered an interest rate of -30bp (Basis point, 1bp=0.01% point) plus +30bp compared to individual public interest rates (private bond appraiser valuation rates), and the two-year product filled the recruitment volume at -10bp.
However, for the three-year product, the quantity was filled at +1bp. It is a disappointing level of interest rate compared to the success of both Hanwha Solution (009830) and Macquarie Infrastructure (088980) (AA), which conducted demand forecasts on the same day. However, the bond fund received KRW 30 billion at +1bp for the first time in a while.
Hotel Lotte also received 539 billion won in orders for 150 billion won in January, when the early-year effect was in full swing, but it also received a somewhat disappointing result that both two-year and three-year products were filled at +1bp. Although it was successful in terms of recruitment volume in the second public bond challenge, it had a rather disappointing result in interest rates.
Hotel Lotte's profits have been improving recently due to a recovery in room unit prices and sales rates. Sales rose 41.3 percent on-year to 6.495 trillion won last year, with sales in the hotel sector, in particular, rising 55.7 percent on-year to 1.1343 trillion won. However, despite the increase in sales, the deficit in the duty-free sector widened due to the burden of customer fees for wholesalers, which only reduced operating losses across the company.
As the Seoul Regional Tax Office pointed out that Hotel Lotte transferred its stake in Lotte Chemical to Lotte Holdings in 2018, the total operating cash flow (OCF) fell to 17.3 billion won from the previous year as 169.6 billion won in related corporate tax (including corporate local income tax) was spent last year.
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
