SK Hynix Issues 440 Billion KRW Social Bonds, First Among Domestic Private Companies

Following the issuance of $1 billion environmental bonds early this year, ESG management accelerates with the issuance of social bonds

[Asia Economy Reporter Kim Hyewon] SK Hynix announced on the 7th that it will issue 440 billion KRW worth of won-denominated bonds as Social Bonds. This is the first time a private company in Korea has issued Social Bonds.

Social Bonds are a type of ESG (Environmental, Social, and Governance) bond issued to raise funds for projects aimed at solving social issues such as job creation, support for vulnerable groups, and social infrastructure development. Until now, Social Bonds in Korea have only been issued by public enterprises and financial companies. General companies have only issued Green Bonds or Sustainability Bonds, which combine Green Bonds and Social Bonds.

Following its issuance of 1 billion USD worth of Green Bonds in January, becoming the first global memory semiconductor company to do so, SK Hynix is now issuing Social Bonds. The credit rating agency Korea Ratings assigned the highest grade, SB1, to SK Hynix’s Social Bonds and positively evaluated the company’s commitment to solving social issues. Including the 440 billion KRW Social Bonds, SK Hynix issued a total of 1.18 trillion KRW worth of won-denominated bonds.

Domestic institutional investors placed orders totaling 960 billion KRW for these Social Bonds. As a result, the company increased the issuance size from the initially planned 280 billion KRW to 440 billion KRW.

SK Hynix plans to use the funds raised through the Social Bonds to address social issues by ▲providing basic infrastructure services to support vulnerable groups, local communities, and people with disabilities ▲supporting financing and employment for small and medium-sized enterprises for mutual growth ▲investing in industrial accident prevention facilities and supporting safety and health sectors through industrial accident prevention activities.

Yang Hyungmo, Head of Financial Management at SK Hynix, said, "SK Hynix’s financial story, which aims for balanced growth in DRAM and NAND flash businesses while strengthening ESG management to contribute to society, sincerely resonated with investors, enabling the successful issuance of these Social Bonds. We will actively pursue not only strengthening existing activities that seek economic value while solving social problems but also discovering new initiatives."