Hana Bank Issues 500 Million Euro Social Covered Bond... Negative Interest Rate

[Asia Economy Reporter Kiho Sung] Hana Bank announced on the 20th that it has successfully issued 500 million euros worth of medium- to long-term foreign currency bonds.

The issued bonds are fixed-rate euro-denominated covered bonds (dual recourse bonds) with a maturity of 5 years and an issuance rate of minus 0.170% per annum.

The lead managers for the issuance were BNP Paribas, Citi, JP Morgan, Soci?t? G?n?rale, and Cr?dit Agricole Securities, and the bonds received the highest credit rating of ‘AAA’ from international credit rating agencies Standard & Poor’s (S&P) and Fitch.

Hana Bank particularly issued the bonds in the form of social bonds reflecting recent interest in environmental, social, and governance (ESG) bonds that emphasize corporate social responsibility.

A Hana Bank official stated, "This euro-denominated covered bond was issued at a negative interest rate and is the lowest rate ever for Korean euro public bonds. It is significant in terms of diversifying funding sources and expanding the investor base."

He added, "This reflects the positive evaluation of Korean bonds by foreign investors despite the global economic downturn caused by the novel coronavirus disease (COVID-19), and it will have a positive impact on improving the issuance conditions of financial bonds by domestic financial institutions this year. We plan to gradually increase the issuance of ESG bonds to fulfill corporate social responsibility."