Hyundai Heavy Industries (HHI) succeeded in its first overseas public sale of green bonds.

The shipyard announced on March 21 that it has sold five-year green bonds, guaranteed by the state-run Korea Development Bank (KDB), in the amount of USD 600 million.

This is a two times oversubscription versus the initially targeted amount of USD 300 million. The 42 investors included Asian, European and Middle Eastern institutional investors.

The issuance was co-hosted by KDB, BNP Paribas Securities, HSBC Securities, and Standard Chartered Securities.

The bonds carry an interest rate equal to the five-year U.S. Treasury yields plus a spread of 0.95%p.
This is 0.20%p lower than HHI’s original offer.

Considering how the overall market sentiment has been negatively affected by the recent surge of worldwide geopolitical volatility coupled with a hike in the U.S. Fed Funds Rate, it is all the more encouraging that HHI’s environmental, social and governance (ESG) management activities seem to have assured investors that the company is creditworthy.

HHI will use the proceeds to finance the construction of eco-friendly vessels.

As the shipbuilding market booming worldwide, HHI is proactively planning for fundraising opportunities to strengthen investment in eco-friendly ships and establish a virtuous cycle of sustainable growth based on ESG management.

HHI signed a KRW 480 billion green loan contract in June 2020, a loan instrument for eco-friendly projects. It also floated KRW 300 billion in KRW-denominated green bonds in March this year. As such, HHI continues expanding its investment in green shipping.

“The successful sale of our green bonds is indicative of how global investors are recognizing our ESG commitment,” said an official of HHI. “We will consolidate our leading position in the market based on technological prowess in green shipping.”

HHI Group is accelerating the drive towards ESG management. In November last year, it presented “Future From the Ocean” as the Group’s ESG management vision, proclaiming the slogan, “Beyond Blue, Forward to Green”.