May 13 (Bloomberg) -- Hynix Semiconductor Inc., the world's second-largest computer memory chipmaker, is among South Korean companies seeking $2.75 billion of loans this week as Asia's third-largest economy grows.

Hynix wants to borrow $1.25 billion to boost working capital and repay debt, Chung Hyung Ryang, chief financial officer of the Inchon-based company, said. New Songdo City Development LLC, a property project that includes Posco Engineering & Construction Co., plans to borrow $1.5 billion.

South Korea's government is targeting 5 percent growth this year from 4.6 percent in 2004 as consumer spending improves. South Koreans cut back on purchases over the past two years after piling on debt when the government encouraged the use of credit cards as part of an economic stimulus program.

``Momentum in the South Korean loan market is picking up because companies are looking to expand investments as the economy recovers,'' Seon Ho Lee, deputy head of syndication at Korea Development Bank in Seoul, said in an interview. ``Banks are eager to build assets as companies' financial positions improve.''

South Korean companies signed $2.2 billion of syndicated loans so far this year, almost three times the amount in the same period of 2004, Bloomberg data show.

Hynix plans to borrow $750 million for five years to repay debt and $500 million for three years to use as working capital, Hynix's Chung said in an interview. The loan is part of a $2 billion finance package that includes a $750 million bond sale.

``The bond and $750 million loan will be used to repay $1.5 billion of debt before they are due at the end of 2006,'' Chung said. ``We want to repay it early because we are reorganizing and diversifying our debt maturity profile.''

Hynix

Hynix may hire Korea Exchange Bank, its main lender, Korea Development Bank, Chohung Bank, Woori Bank and one foreign bank to arrange the loan, a banker involved in the deal said. The company plans to sign the credit in June.

One-third of the five-year loan will be denominated in Korean won, the banker said. It may pay interest about 2.5 percentage points more than the London interbank offered rate for the dollar portion of the five-year loan.

Three-month Libor, an average of rates set daily by banks and used as a borrowing benchmark, was 3.26 percent yesterday.

Hynix is rated B+ by Standard & Poor's, four levels below investment grade.

New Songdo, a $20 billion property development venture including Posco Engineering and U.S. real estate investor Gale Co., is seeking $1.5 billion to fund the project in Inchon, southwest of Seoul, said Kim Seok Tae, manager of New Songdo's finance team in Seoul.

New Songdo

The property development company hired ABN Amro Holding NV, Kookmin Bank and Woori Bank to arrange the loan in dollar and won, Kim said in an interview.

New Songdo is turning more than 1,000 acres of reclaimed waterfront land into residential, retail and commercial developments, New Jersey-based Gale said on its Web site.

Some lenders will be able to share the profit, Kim said. He declined to disclose the terms of the loan.

Ratchaburi Power Co., a venture led by Hongkong Electric Holdings Ltd. and Thailand's Ratchaburi Electricity Generating Holding Pcl, is seeking to borrow $652 million to fund a 1,400- megawatt power plant in Thailand.

Ratchaburi Power plans to hire banks this month to arrange the dollar and Thai baht-denominated, 15-year loan, said Thomas Fung, Ratchaburi Power's director of project finance in Bangkok.

Ratchaburi Power

The gas-fired plant will cost less than $1 billion and come into operation in 2008, Fung said in an interview. It will account for 6 percent of Thailand's projected installed capacity, Hongkong Electric said on its Web site.

The plant will sell all of its electricity to the state-owed Electricity Generating Authority of Thailand, Hongkong Electric said on its Web site.

``For an international investor, Thailand's power market is a secure investment,'' said Rohan Dalziell, head of Asian utilities research with Macquarie Securities Ltd. in Hong Kong. ``When you build power plants in Thailand, you do get paid.'' Electricity Generating Authority of Thailand has never defaulted its electricity payment even during the Asian financial crisis in 1997, he said.

To contact the reporter for this story: Patricia Kuo in Hong Kong at pkuo2@bloomberg.net

Last Updated: May 12, 2005 13:17 EDT