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LG Electronics, a global leader in electronics manufacturing, is reportedly set to raise up to $1 billion through a dollar bond deal, aiming to bolster its financial standing and fuel its future growth strategies.
According to sources familiar with the matter, LG Electronics has engaged investment banks to orchestrate a dual-tranche dollar bond offering. The arrangement consists of a 3-year and a 5-year dollar bond, details of which were disclosed in a term sheet that Reuters accessed on Thursday.
Reuters reported that while the insiders chose to remain anonymous due to the sensitivity of the information, the initial price guidance laid out was 135 basis points over the 3-year Treasuries for the 3-year bond and 150 basis points over the 5-year Treasuries for the 5-year installment.
At this point, LG Electronics has not provided an official statement regarding the bond deal.
Strategic Use of Raised Capital
According to CNA, the proceeds from the 3-year bond are earmarked for general corporate operations, including new investments and the refinancing of looming debts, as per the circulated term sheet. On the other hand, the 5-year bond, branded as a sustainable bond, is intended to fund green and social projects, highlighting LG Electronics' commitment to sustainability and corporate social responsibility.
Future Growth Plans
This financial maneuver is part of LG's strategic efforts to solidify its position in the global market. Last year, LG announced ambitious plans to become one of the top 10 global companies in-vehicle components by 2030. The strategy involves more than doubling its revenue in this sector to 20 trillion won.
Additionally, LG aims to enhance its service platforms across its home appliance and TV businesses, focusing on areas that promise recurring profits, such as media subscriptions and rentals, reinforcing its presence in both the tech and sustainability realms.
The company's approach to expanding its financial base through bonds, mainly focusing on sustainability, reflects a broader trend in corporate finance, aligning financial growth strategies with global sustainability goals.
Photo: LG Newsroom
