Asia's largest liability management exercise launched

Kepco launches a consent solicitation for $3.7 billion of its dollar debt.

Lead managers Credit Suisse First Boston and Lehman Brothers launched a consent solicitation yesterday Thursday covering 19 Eurobonds and Yankee bonds issued by Korean electricity utility Kepco. The solicitation has been prompted by the restructuring of Korea's domestic electricity industry, which will see five generating companies split from the transmission and distribution company, Kepco, and sold to third party investors.

However, before the next stage of the restructuring can proceed, two main issues need investors' consent. The first one comprises the joint and several liabilities clauses which exist between Kepco and the gencos.

When the gencos were initially hived off from the parent in 2001, a series of cross guarantees were put in place to...

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