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Hyundai Heavy issues $300m bond to fund green vessels

The South Korean group said the bond issue had been backed by over 40 Asian, European and Middle Eastern institutions

Hyundai Heavy’s fundraising was keenly supported by foreign investors despite geopolitical tensions and the US Fed’s rate hike last week

HYUNDAI Heavy Industries has sold $300m-worth of green bonds to raise funds for use in the construction of eco-friendly vessels.

It said it raised the funds from foreign investors in spite of geopolitical tensions and last week’s US interest rate hike which have soured investor sentiment.

The bond proceeds will also be used to establish a system of sustainable growth based on environmental, social and governance management.

“Our ESG management activity has drawn positive responses from overseas investors, despite worsening investor sentiment stemming from unstable international geopolitical conditions and a US rate hike,” the South Korean company said, adding that the bond issue was oversubscribed two times and had the backing of 42 Asian, European and Middle Eastern institutions.

Its first overseas bond issue, which matures in five years, carries an interest rate which equals the yield on five-year US Treasuries plus a 0.95 percentage point spread, representing a 0.20 percentage point reduction from its original offer.

HHI’s debt issue is guaranteed by state-run Korean Development Bank.

So-called green bonds are designed to raise funds to support environmental projects and other eco-friendly infrastructure investments.

HHI has been stepping up its ESG management initiatives. In June 2020 it signed a loan agreement, the proceeds of which are to be used for eco-friendly projects.

The flagship of Korea Shipbuilding & Offshore Engineering will change its corporate name next week to HD Hyundai.

“The name change is aimed at shifting away from the image of a traditional manufacturer to an investment company exploring new growth engines,” it said.

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