Paradise Co attracts US$153mln in new bond orders, 3 times its target: report

Paradise Co Ltd, a South Korean operator of foreigner-only casinos, attracted investor orders for a planned public offering of corporate bonds, which exceeded three times the firm’s target amount. That is according to a Tuesday report in South Korean financial news outlet edaily. The media platform said – citing investment banking sources – that Paradise Co had received a total of KRW205 billion (US$153.1 million) in orders during Tuesday’s bookbuilding process for the issuance of KRW60 billion worth of corporate bonds. That was approximately 3.4 times the target amount, noted edaily, adding that investor appetite varied by tranche and associated maturity date. Paradise Co plans to use the funds raised through the corporate bond issuance to repay debt, per the media report. The company runs casinos in Seoul, Jeju, and Busan, and operates the Paradise City casino resort at Incheon in partnership with a unit of Japan’s Sega Sammy Holdings Inc. In Tuesday’s exercise, orders totalling KRW149 billion were received for a two-year tranche of bonds, versus an original KRW30-billion target. Orders worth KRW56 billion were received for a three-year tranche, which also had an original KRW30-billion target. According to edaily, citing banking sources, Paradise set its target yield band at 30 basis points below to 30 basis points above the individual market average yield. The news outlet said the two-year tranche reached its target at a yield one basis point below the individual market average. In contrast, the three-year tranche reached its target at a spread of 27 basis points above the individual market average yield. The news outlet cited a Paradise Co official as saying: “Since Paradise’s individual weighted-average yield is lower than the average for the same rating (A+), and the yield spread between the two-year and three-year bonds is not significant, there was limited additional yield incentive for investors to choose the three-year bond.” The company official was also quoted as saying: “We believe demand concentrated on the two-year bond as this aligned with the recent preference for short-term bonds in the bond market.” In the nine months to September 30, Paradise Co’s aggregate casino sales reached KRW744.59 billion, a 10.8-percent increase from the prior-year period. September sales alone were up 38.2 percent year-on-year, according to a recent filing to the Korea Exchange.