Posco cuts debt with Korea's first bond tender offer

Posco said Wednesday it has completed a partial early redemption of its US dollar-denominated bonds through a debt tender offer, becoming the first Korean company to do so.

The steelmaker repurchased $360 million of its $1 billion in five-year, 5.75 percent fixed-rate bonds issued in 2023 and originally due in January 2028.

The early redemption, funded with existing cash reserves, is expected to reduce debt and save about $31 million in interest expenses that would otherwise have accrued until the bonds’ original maturity.

Following the transaction, $640 million of the bonds remain outstanding.

Unlike a private bilateral buyback, a debt tender offer is extended to all bondholders, offering greater transparency and equal treatment for investors.

Posco said the move would help stabilize its foreign currency debt structure and strengthen its financial position amid persistent global economic uncertainty.

“The early redemption was aimed at reducing financing costs and managing our debt,” a Posco official said. “By maintaining tighter control over our foreign currency liabilities, we will further strengthen our financial soundness.”