How are the shares to be delivered under an exchangeable bond secured and held?

Because an exchangeable bond is exchanged for securities held by the issuer, such as shares of another company, the board decides the type and details of the shares or securities to be exchanged, the exchange terms and the exchange request period.

Under the Enforcement Decree of the Commercial Act, the issuer must deposit the shares or securities needed for the exchange with the Korea Securities Depository or register them electronically with an electronic registration institution until a bondholder requests an exchange or the exchange request period ends, and that institution manages them with an indication that they are trust property. This is a safeguard that sets the exchangeable securities aside in advance so that exchange requests can be met.