Reflects Positive Evaluation from Global Investors on Stable Profitability and Strategic Importance within the Group

$300 Million in 3-Year Bonds and $400 Million in 5-Year Bonds with an Interest Rate of 6.375%, Totaling $700 Million

POSCO’s Indonesian joint venture, PT Krakatau POSCO, successfully issued global bonds totaling $700 million on May 30. The dual-tranche bonds consist of $300 million with a 3-year maturity and $400 million with a 5-year maturity. This marks the first instance of a POSCO Group affiliate issuing global public bonds based on its own credit rating, independent of POSCO. The bonds have an interest rate of 6.375% for both maturities, and the funds raised will be used to repay existing debt.

* Dual-tranche: Issuing two bonds simultaneously with different maturities or interest terms.

PT Krakatau POSCO is an integrated steel mill jointly formed by POSCO and Indonesia’s state-owned steel company, Krakatau Steel, in 2010. It currently operates one blast furnace with a production capacity of 3 million tons, along with hot rolling and heavy plate mills. The successful bond issuance by a local steel company in Southeast Asia, a region with relatively high country risk, is attributed to stable performance and the strategic importance of the project in the group’s overseas operations.

PT Krakatau POSCO has reported operating profits for three consecutive years, making it the third most significant entity in the group following POSCO International. On May 17, the international credit rating agency Standard & Poor’s (S&P) said in a report, “PT Krakatau POSCO is expected to maintain a solid market position and stable profitability in Indonesia. Considering its substantial role and investment scale in the group’s overseas operations, it is deemed a strategically important subsidiary.” S&P assigned a BBB- (stable) credit rating to its unsecured U.S. dollar bonds.

These points were emphasized during global investor presentations for the bond issuance. PT Krakatau POSCO announced its intention to issue global bonds in the Asian market on May 17, and began investor recruitment. From May 20, investor presentations were held in Singapore, Hong Kong, and London. POSCO, the parent company, also participated in these presentations to support PT Krakatau POSCO.

Ultimately, the bond issuance attracted 191 global institutional investors, with orders amounting to approximately $4.9 billion, nearly seven times the final offering amount. As a result, 80% of the bonds were allocated to Asian investors, while European and Middle Eastern investors received 20%.

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◈ What is ‘POSCO Global Volunteer Week’ ?

The Global Volunteer Week, starting in 2010, is hosted to settle in sharing as a corporate culture within POSCO, as a global corporate citizen, and is POSCO`s unique social contribution activity to globally increase POSCO Family`s sense of belonging and pride.

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In Korea, POSCO employees engaged in various volunteer work: Some helped agricultural communities in Pohang and Gwangyang, while others participated in building homes with Habitat for Humanity and in ‘Clean Ocean Volunteers’, POSCO’s sea environment preservation volunteer initiative. Some also volunteered to preserve our cultural heritage at Gyeoungju, a city of much historical significance. CEO Kwon Ohjoon also volunteered to deliver lunch boxes to neglected elders living alone at permanent rental housing for the poor.

Now, let’s have a look at what POSCO employees around the globe did to help their local communities in this 2014 POSCO Global Volunteer Week!

Indonesia Krakatau: Repairing Schools and Religious Facilities

[POSCO Indonesia team helped repair schools and religious facilities]

POSCO employees at Krakatau, Indonesia visited local schools and religious sites to help improve the conditions by cleaning, painting and repairing the buildings. Props to team Indonesia!

China Qingdao: Warmhearted Caring for Deaf Children

[POSCO China had a meaningful time with deaf children]

In China, POSCO employees cared for deaf children and helped improve the living conditions of ethnic Koreans.

Malaysia MKPC: Remodeling Welfare Center for the Elderly

[Employees at POSCO Malaysia helped remodel a welfare center for the elderly]

POSCO Employees at Malaysia MKPC pulled up their sleeves to remodel a nearby center for senior citizens and clean up local schools. Kudos to POSCO Malaysia for their hard work in spreading love to the community!

POSCO Japan – Cleaning the Streets & Bazaar Event

[POSCO Japan employees cleaned the streets around Nagoya Castle]

POSCO Japan employees cleaned up the area around Nagoya Castle and Arakawa River. They also held a bazaar event for the physically challenged. “I had a meaningful time aiding and caring for the physically challenged during the bazaar event. I’m looking forward to more opportunities to do volunteer work,” said Takimoto Mami, a JEPC employee who participated in the event. “It makes me feel happy and proud to be a part of POSCO when I see my fellow employees actively participate in volunteer work year after year,” said Jung Min Kim, a JEPC employee who oversees global volunteer work.

POSCO Vietnam: Charity Kitchen

Also, POSCO Vietnam employees helped out a charity kitchen run by a nearby hospital. They delivered the food to people living in poverty-stricken areas. Aren’t you hungry for more interesting episodes? Hello, POSCO blog’s next post will be a close-up story of the Vietnam volunteer work experience with commentaries from POSCO Vietnam employee. Stay tuned!

The POSCO global family had a meaningful time in their respective locations during 2014 POSCO Global Volunteer Week. POSCO will continue its efforts to spread the love as a responsible corporate citizen.