POSCO Chemical Attracts 1.5 Trillion Won for 200 Billion Won ESG Bonds... Issuance Doubled

Issuance of 400 Billion Won

[Asia Economy Reporter Choi Seoyoon] POSCO Chemical has decided to issue bonds worth 400 billion KRW, double the initially planned 200 billion KRW, due to strong demand in the ESG bond subscription forecast.

On the 15th, following the ESG bond subscription forecast, POSCO Chemical significantly increased the bond issuance scale as funds amounting to 1.55 trillion KRW, 7.8 times the target amount, poured in, supported by high growth potential and a credit rating of AA-.

By issuing an additional 200 billion KRW beyond the originally planned amount, POSCO Chemical will be able to more efficiently proceed with investments to strengthen competitiveness in the battery materials business, such as expanding the artificial graphite anode factory and securing cathode material raw materials.

The bonds to be issued this time consist of 250 billion KRW with a 3-year maturity and 150 billion KRW with a 5-year maturity, all issued at interest rates lower than the individual market average rates. The 3-year bonds carry an interest rate 0.25 percentage points lower, and the 5-year bonds 0.30 percentage points lower than the individual market average rates. The interest rates will be finalized based on the individual market average rates as of February 22. The individual market average rate refers to the average rate evaluated by private bond rating agencies.

[Image source=Yonhap News]

Despite the tightening liquidity in the capital market due to global base rate hikes, the influx of investment into POSCO Chemical can be analyzed as a reflection of market expectations that the company will continue growth based on technological competitiveness and securing a full value chain.

ESG bonds are issued for socially responsible investments aimed at improving environment, society, and governance. They are classified into green bonds, social bonds, and sustainability bonds according to their usage. POSCO Chemical is issuing green bonds for investments in eco-friendly businesses.

Prior to the bond issuance, POSCO Chemical received the highest grade 'GB1' in January through the ‘ESG Financial Product Certification (Assessment)’ by Korea Ratings, recognizing the environmental improvement effects of its battery materials business and transparency in fund management and disclosure. Korea Ratings evaluated the company’s ESG performance as excellent, citing the establishment of a responsible mineral management system and social contribution activities based on the corporate citizenship management philosophy.

Yoon Deok-il, Vice President and Chief Financial Officer (CFO) of POSCO Chemical, stated, “Through this ESG bond issuance, we have once again received recognition from investors for the company’s growth potential and ESG management achievements. We will continue efforts to strengthen competitiveness in the battery materials business and eco-friendly management.”