iM Securities, the brokerage arm of iM Financial Group, said on the 9th that it will issue hybrid securities totaling 150 billion won. The amount is equivalent to about 13% of the company's total equity as of the first quarter of this year, and the firm plans to use the capital expansion to grow its trading operations, including bonds and over-the-counter derivatives.
iM Securities plans to issue 30-year privately placed hybrid securities in July in two tranches of 60 billion won and 90 billion won. The issuance rates are approximately 5.9% and 5.68% per annum, respectively, with interest paid every three months. Hybrid securities carry characteristics of both stocks and bonds. Although they have a set maturity, the maturity can be extended at the issuer's discretion, allowing them to be recognized as equity for accounting purposes.
Once the capital expansion is completed, iM Securities' equity capital will increase to the 1.29 trillion won range. Its net capital ratio (NCR) is expected to rise 98 percentage points to 478%, significantly improving its capital adequacy metrics.
Through this capital expansion, iM Securities plans to expand its trading operations, strengthen its investment banking (IB) and project financing (PF) businesses centered on high-quality deals, and grow its brokerage business.
"We decided to pursue capital expansion through the issuance of hybrid securities in order to secure a foundation for sustainable growth," an iM Securities official said. "We will use the secured capital efficiently to build our competitive edge in business operations."
