Kim & Chang acted as the Korean legal counsel for the underwriters in the issuance of exchangeable bonds by LG Chem. LG Chem issued (i) 1.25% exchangeable bonds worth USD 1 billion due on 2028, and (ii) 1.60% exchangeable bonds worth USD 1 billion due on 2030 ((i) and (ii) are collectively referred to as the “Bonds”). The Bonds are exchangeable for fully paid shares of common stock of LG Energy Solution. Through the issuance of the Bonds, LG Chem was able to raise capital at low interest and financing costs. Our firm successfully advised and assisted the managers in connection with the issuance of the Bonds from a “Korean law” perspective.

It is not common for Korean companies to issue bonds exchangeable into shares of their respective subsidiary in cross-border capital markets due to a number of legal issues from the foreign exchange, disclosure and tax regulation perspectives.

Despite the fact that there were a limited number of cross-border exchangeable bond issuances to rely on for reference and no clear guidelines by the Korean regulators on some related legal issues, our firm successfully assisted the managers in resolving such issues by thoroughly researching and analyzing applicable laws and helping them establish a legal basis and foundation.