이 기사는 2022년 01월 19일 08:12 thebell 에 표출된 기사입니다.

South Korea’s Mirae Asset Securities will be the first among domestic securities firms to sell a corporate bond, which is expected to be a gauge for investor sentiment for bonds issued by brokerage firms.

Mirae Asset Securities plans to conduct a bookbuilding process on Tuesday to sell a 300 billion won ($252 million) bond on January 25. It aims to raise 150 billion won in a 3-year tranche, 100 billion won in a 5-year tranche, and 50 billion won in a 7-year tranche, with a possibility of increasing the amount to 500 billion won depending on the results of the bookbuilding.

NH Investment & Securities, SK Securities, and Hana Financial Investment are lead bookrunners in the deal while Shinhan Investment Corp and Hyundai Motor Securities participate in an underwriting syndicate.

Thanks to its equity capital of 10 trillion won, Mirae Asset Securities has actively expanded alternative investments at home and abroad. The broker has boosted its equity capital by exchanging treasury shares with the nation’s internet giant Naver and rights offering. Its equity capital increased from 6 trillion won in 2016 to 10 trillion won.

Mirae Asset Group has made active mergers and acquisitions (M&A) deals and large-size investments in overseas assets. Mirae Asset Securities’ exposure to overseas alternatives amounted to about 3.8 trillion won, or 40.5% of its equity capital.

After obtaining the maga investment bank status, the brokerage has ramped up its efforts to expand its presence in the global markets through 11 overseas subsidiary offices in countries like Hong Kong, the UK and the US.

In 2020, the pre-tax profit of overseas subsidiaries has grown to account for about 20% of the consolidated pre-tax profit. The brokerage firm is expected to continue to provide financial support to overseas subsidiaries.

Overseas alternative investments carry high risks due to uncertainties on investment performance and exit timing. Mirae Asset Securities’ loans categorized as precautionary and below increased to 373.6 billion won in the third quarter of 2021 from 150 billion won at the end of 2019.

The proportion of high-risk assets and risk preference in terms of asset composition are also high. Hotels and airlines, which are highly impacted by the Covid-19 pandemic, account for about 35% of its overseas alternative assets.

The financial soundness of overseas project financing business sites, hotels, and commercial real estate has continued to deteriorate due to the mutant Covid-19 variant. Credit rating agencies are monitoring the possible impact of delayed sell-down as the value of overseas real estate may decline due to delays in development projects.

Credit rating agencies estimate that the firm's exposure to overseas assets with a relatively high level of credit risk to be about 4.5 trillion won.

Mirae Asset Securities’ capital adequacy has significantly deteriorated compared to the past, with its adjusted net operating capital ratio hovering around 170% due to delayed exits of overseas alternative investments.

The brokerage firm has taken a conservative approach to new investment after the pandemic and is managing the total contingent liabilities at around 1.7 trillion won in the third quarter of 2021. The firm also brushed off some risks after it won a lawsuit against China's Anbang Insurance Group over its cancelation of a $5.8 billion deal to buy 15 hotels in the US.

“Mirae Asset Securities will receive about 550 billion won deposit it paid to Anbang along with accrued interest, which will likely improve the broker’s financial soundness,” Korea Investors Service said. (Reporting by Chan-mi Oh)