The Korea Development Bank has issued its first green bond aimed at funding implementation and expansion of renewable energy projects.
The Bank raised $300 million from investors in Asia, Europe, and the United States and offered “quarterly floating rate coupon of 3-month USD LIBOR plus 0.725% per annum to a maturity date of 6 July 2022.” Proceeds from the bond will be targeted at wind, solar, and biomass power projects.
Being a government-backed institution, the Bank’s bond issue was hugely popular among global investors who were willing to invest up to $650 million against the bond size of just $300 million.
Asia was allocated 46%, European accounts purchased 18%, while US-based accounts purchased the remaining 36%. By investor-type, bank treasuries took 32% of the issuance, fund managers 26%, central bank/sovereign wealth fund/agency 23%, pension 14%, private banks and others 5%.
Korea may not be a buzzing market in the global green bonds market, but it has seen some significant bond issues. Last year, the Export Import Bank of Korea issued a green bond, the first in three years, to raise $400 million. That issue, too, over-subscribed by about three times with investors willing to pour in $1.1 billion.
Hyundai Capital Services issued a unique green bond that aimed at providing debt finance to consumers buying hybrid vehicles. The $500 million bond issue attracted investment offers of $1.2 billion with more than half the investors hailing from non-Asian countries. The bond was named as the best in North Asia in 2016.