Korea Electric Power Corp. (KEPCO)'s Mexican unit (KST) successfully issued a $400 million project bond to the U.S. stock market on Dec. 20, achieving a refinancing of the Norte II project in Mexico.
This is the first time that a domestic company has led the Export-Import Bank of Korea (Korea Exim)-guaranteed project bond for overseas infrastructure assets.
KEPCO has been pushing for refinancing to reduce financial costs and generate additional profits through leverage optimization. KEPCO successfully issued the project bond, which completed the repayment of the remainder of the existing loan and also recouped the entire investment of about $58.8 million six years after commercial operation.
In addition, KEPCO improved profitability by lowering interest rates by about 2.5p points compared to existing loans and increasing the value of dividends.
"With the successful refinancing of the Norte II project, KEPCO not only maximizes shareholders' profits by reducing the procurement rate of existing operations, but also helps reaffirm KEPCO's strength and brand power in the global PF market by diversifying its financing by taking a step further from the existing PF lending system," a KEPCO official said.
Meanwhile, KEPCO is a major shareholder of the Norte II project in Mexico with a 56 percent stake in the construction and operation of a 433MW gas-combined thermal power plant in Chihuahua, Mexico in cooperation with Samsung Asset Management and Techint.