LG Chem announced Thursday it plans to issue corporate bonds worth 1 trillion won ($885 million).

The Korean firm said it decided to increase the initially planned 500 billion won of corporate bonds to 1 trillion won after carrying out “demand forecasting” for institutional investors this week. 

The demand from investors stood at a total of 2.64 trillion won, the largest since Korea adopted the demand forecasting system in 2012, the firm said.

By segment, it plans to issue 160 billion won bonds with a three-year maturity, 240 billion won with five-year maturity, 200 billion won with a seven-year maturity and 400 billion won with 10-year maturity.

The firm said a fixed interest rate will be determined on Tuesday and it is estimated to be around 0.01 percentage point to 0.07 percentage point lower than credit rating agencies’ average bond interest rate.

“The successful issuance of corporate bonds is possible as investors have positively evaluated the company’s stable financial condition and future growth,” said LG Chem COO Chung Ho-young.

The company plans to use the funds to expand production capacity of electric vehicle batteries and its naphtha cracking centers in Yeosu, a port city on Korea’s East China Sea coast.

By Shin Ji-hye (shinjh@heraldcorp.com)