South Korea’s state utility firm Korea Electric Power Corp. (KEPCO) issued 200 billion won ($170.8 million) worth won-denominated sustainability bonds, becoming the nation’s first energy firm to sell socially-focused debts.
The company announced Thursday that it offered 100 billion won bonds with three-year maturity at a coupon rate of 1.485 percent, 40 billion won in five-year date at 1.646 percent and 60 billion won bonds at 1.715 percent. They were at least 3 basis points lower than the average debt borrowing rates for utility firms.
“The rate is almost the lowest among won-denominated environmental, social and governance (ESG) bonds offered by domestic energy companies,” said KEPCO.
Sustainability bonds are debts raised to serve environmental and social purposes such as creating jobs and supporting low-income earners.
The company said it will use the proceeds to pay back its maturing debts as well as to finance various social and green projects such as strengthening solar and wind power businesses at home and abroad, building electric vehicle charging stations, supporting small businesses and startups and creating jobs.
“The high demand for our debt offerings showed investors’ strong confidence in the fundamentals of KEPCO at a time when uncertainties are rising due to the prolonged U.S.-China trade war and Japan’s trade restrictions,” said an official from the company. “The successful sale of $500 million worth green bonds in the overseas market in the first half and the latest sustainability bonds would help us to promote social value and reduce financial costs.”
Source: Pulse News