Shinhan Bank Issues $500 Million ESG Bonds in the US to Enhance Social Value

[Asia Economy Reporter Kwangho Lee] Shinhan Bank announced on the 15th that it has successfully issued $500 million USD worth of 5.5-year maturity foreign currency social bonds (ESG bonds).

The coupon rate for the ESG bond issuance was set at 1.375% (fixed), which is 0.65% above the 5-year U.S. Treasury yield.

Despite abundant liquidity, the issuance was made amid increased market uncertainty compared to the beginning of the year due to the spread of COVID-19 and monetary policy easing in major countries. The attempt to raise funds in the form of ESG bonds maximized participation from related investors and was evaluated as having been issued at a competitive rate.

Shinhan Financial Group has established five major ESG tasks including the Zero Carbon Drive and Triple K Project, and has put ESG management into practice by launching an ESG Promotion Committee with CEOs from all affiliates participating. This bond issuance was also promoted as part of the group’s ESG strategy.

A Shinhan Bank official stated, "The proceeds from the issuance will be used for domestic and international eco-friendly related projects and support projects for financially vulnerable groups that align with the purpose of the issuance," adding, "Going forward, we plan to prioritize ESG bond issuance to enhance market participants’ trust in the group’s and bank’s commitment to ESG management and to expand the investor base."