Posted April. 23, 2002 09:39,
A new product Equity Linked Note (ELN) to minimize the risk due to the stock price plunge appeared on the market. According to SSB and the Securities business, SSB purchased 1 million stocks of SK Telecom for 265.7 billion won from KT and issued ELNs on the stocks on April 11th. The ELNs were reportedly sold to domestic insurance companies (100 million dollars) and to a foreign investor (100 million dollars) respectively.
The uniqueness of the ELN is in the elimination of the risk due to the stock price plunge by holding the right to sell the stocks in the case that the SK Telecom stock price goes down.
By the issue of ELN, KT sold 1 million stocks of SK Telecom (1.1 percent) without affecting the stock price and the buyers of ELN are expected to be free from the risk of the stock price plunge. SSB reportedly received 1 percent premium of total transaction from KT and ELN buyers.