Shinhan Financial Group Successfully Issues $500 Million Foreign Currency Social Bond, First Among Domestic Financial Holding Companies

Strengthening Post-COVID Resilience through Proactive Funding Support
Leveraging Parent Company's High Credit Rating to Establish an Optimized Group-Level Foreign Currency Financing Platform

[Asia Economy Reporter Kim Hyo-jin] Shinhan Financial Group has succeeded in issuing a $500 million foreign currency social bond to overseas investors, becoming the first domestic financial holding company to do so.

Social bonds are special purpose bonds aimed at solving social issues such as supporting low-income groups and small and medium-sized enterprises (SMEs). Shinhan Financial Group had already succeeded in issuing $500 million worth of foreign currency sustainable (ESG) subordinated contingent capital securities (subordinated bonds) in August last year.

According to Shinhan Financial Group on the 7th, the social bond issuance was successfully carried out based on Shinhan Financial Group's high credit ratings (Moody's A1, S&P A). The bond issuance yield is 1.365%, which is 105 basis points above the 5-year U.S. Treasury yield.

In particular, Shinhan Financial Group is the only domestic financial holding company to have successfully issued special purpose bonds, and it is also the first to issue them in foreign currency. Shinhan Financial plans to use the $500 million foreign currency social bonds issued this time to focus on supporting SMEs struggling due to the novel coronavirus disease (COVID-19).

Shinhan Financial plans to leverage the holding company's high credit rating and issuance capabilities to unify the foreign currency funding channels of non-bank subsidiaries under the holding company, thereby establishing an optimized foreign currency funding platform at the group level.

A Shinhan Financial Group official said, "This social bond was issued to proactively support companies struggling due to COVID-19 by utilizing the core functions of finance," adding, "It is highly meaningful that we successfully raised funds in the global bond market, which has become highly volatile due to COVID-19, thereby expanding corporate funding capacity."

Meanwhile, this issuance secured orders totaling about $2.3 billion, approximately 4.6 times the issuance size, from 134 institutions. By region, the distribution was 23% in the Americas, 59% in Asia, and 18% in Europe. The bond issuance was jointly led by BOA, BNP Paribas, Cr?dit Agricole, JP Morgan, and Mizuho, with Shinhan Investment Corp. participating as a co-manager.