Korea's largest securities firms are quietly competing to win underwriting mandates from LG Chem (051910.KS, Korea's biggest chemicals maker) and the Ecopro group (086520.KQ, a battery-materials holding company) well before either company has formally launched a deal, the Chosun Biz MoneyMove desk reported on June 26, citing investment-banking sources. Coverage teams—and in some cases IB division heads personally—are pitching financing structures to lock in lead-manager status early, the report said.
For a portfolio manager, the first question is which name carries a hard, dated obligation. That is Ecopro.
The near-term catalyst: a July 24 put option
Financial investors holding convertible bonds (CBs) issued by Ecopro BM (247540.KQ, Korea's largest cathode-active-material supplier) can exercise an early-redemption put option on July 24, according to Chosun Biz. The CB was issued in 2023 at ₩440 billion ($321 million), with an initial conversion price of ₩275,000 ($201) per share. After repeated downward resets (refixing), the conversion price stands at ₩214,888 ($157) as of mid-June, per Invest Chosun—well down from the original ₩275,000.
The problem is that Ecopro BM closed at ₩133,700 ($98) on June 26 per Chosun Biz—roughly 38% below even the reset conversion price. With the bonds deep out of the money, holders have little reason to convert to equity and every reason to demand cash. The 2023 issuance carried a 0% coupon but a 2% yield to maturity (compounded annually), Invest Chosun reported, which is why a full put would require Ecopro BM to repay roughly ₩466.9 billion ($341 million)—principal plus accrued interest—rather than just the ₩440 billion face value.
The market sees two paths: the company negotiates revised terms—such as a higher maturity yield—to keep the money in place, or it funds an actual cash redemption through refinancing CBs, straight bonds, or structured financing. Because Ecopro is Ecopro BM's largest shareholder, Chosun Biz noted, the size of the put and any refinancing could spill into group-level funding needs.
LG Chem: a larger, slower-burning need after a rating cut
LG Chem's pressure is structural rather than calendar-driven. Moody's downgraded LG Chem one notch to Baa2 from Baa1 on November 14, 2025, citing weak petrochemical and cathode earnings and rising debt tied to battery-capacity expansion, per Investing.com's report of the action. S&P Global Ratings, which holds LG Chem at BBB, revised its outlook to negative on March 5, 2026, per Investing.com. Higher borrowing costs make large-scale bond refinancing more expensive than in the past—just as the company juggles advanced-materials investment with balance-sheet repair.
The likely workaround, according to Chosun Biz, is another price return swap (PRS)—a derivative that lets LG Chem raise cash against its stake in listed battery affiliate LG Energy Solution (373220.KS, Korea's biggest EV-battery maker) without an outright block sale. The precedent is recent: in November 2025 LG Chem monetized 5.75 million LG Energy Solution shares worth about ₩2 trillion ($1.46 billion) via PRS, the Seoul Economic Daily reported, and roughly 80% of those shares have since been absorbed back into the market. With that overhang largely cleared and bond financing now costlier, brokers expect LG Chem to reach for the PRS playbook again, intensifying the contest for the next mandate.
What to watch
The July 24 put deadline is the first concrete data point: the proportion of the ₩440 billion CB that holders actually redeem will reveal how much fresh cash Ecopro BM—and potentially the wider Ecopro group—must raise, and how quickly. For LG Chem, the signal is whether a second LG Energy Solution PRS materializes in the second half of 2026, as brokers anticipate.
This article is for informational purposes only and does not constitute investment advice. Figures are drawn from the cited sources; currency conversions use an approximate rate of 1 USD = 1,370 KRW.
