South Korea’s Shinhan Bank sold 200 billion won ($179.6 million) in three-year green bonds to become the first commercial lender in the country to join the green theme pipeline. The Korean bank said Thursday the won-denominated bond was issued at a coupon rate of 2.15 percent, above the three-year government bond yield of 1.98 percent but lower than the three-year U.S. treasury rate of 2.65 percent.
A green bond is a bond that must use the proceeds to fund environmentally-friendly projects such as climate change and renewable energy. It was mainly issued by international organizations and public entities as it is subject to a more rigorous review but has recently been embraced by private companies seeking more socially responsible investments.
Shinhan Bank signed on to the United Nations Environment Programme Finance Initiative in 2008 and has since been committed to advancing sustainable finance. To issue the green bond, it put in place an internal system to comply with the Green Bond Principles stipulated by the International Capital Market Association and received an authorization report from an outside institution.
The green bond issuance comes a week after the bank’s 10-year subordinated debt offering of 400 million Australian dollars ($290 million) at a 5 percent yield, 10 basis points lower than that in the U.S. dollar-denominated market. The bank said the bond, the first Kangaroo subordinated debt to be issued by a Korean financial institution, drew strong demand despite mounting jitters across emerging markets.
Source Pulse News