Due to High Interest, Issuance Scale Increased by 100 Billion Won from Initial Plan
Hyundai Card has become the first in the card industry to issue green bonds in accordance with the Korean-style green taxonomy (hereinafter K-Taxonomy).
Hyundai Card announced on the 9th that it has issued 250 billion KRW worth of such green bonds.
'K-Taxonomy' is a Korean-style green finance classification system jointly established by the Ministry of Environment and the Financial Services Commission. It serves as a standard to determine whether specific technologies or industrial activities are included in eco-friendly efforts for carbon neutrality. It was created to prevent so-called 'greenwashing' amid the recent surge in eco-friendly investment demand, as ESG (Environmental, Social, and Governance) has become a hot topic in the financial market.
This Korean won-denominated green bond, issued for the first time this year targeting domestic institutional investors, totals 250 billion KRW. The maturity is composed of 50 billion KRW for 3 years, 50 billion KRW for 4 years, and 150 billion KRW for 5 years. Due to strong investor interest, the issuance size increased by 100 billion KRW from the initial plan. Hyundai Card plans to use the funds raised through this bond issuance to provide financial services for eco-friendly vehicles such as electric and hydrogen cars from Hyundai Motor Group.
Regarding this green bond, Hyundai Card conducted an external review of K-Taxonomy compliance through NICE Credit Rating. NICE Credit Rating explained, "Financial services targeting eco-friendly vehicles meet all activity criteria, recognition criteria, exclusion criteria, and protection criteria, making them suitable for the Korean-style green taxonomy," and added, "The effect of this green bond issuance is expected to contribute to greenhouse gas reduction through the distribution of approximately 12,500 eco-friendly vehicles."
Meanwhile, ESG bonds issued by domestic financial institutions totaled 5.16 trillion KRW up to last month this year. Of these, only 630 billion KRW were issued as green bonds. The issuance of ESG bonds has decreased by more than half due to the ongoing economic slowdown and high interest rates since last year.
A Hyundai Card official stated, "Despite these market conditions, Hyundai Card succeeded in issuance based on excellent internal fundamentals," and explained, "With the inclusion of 'financial services' in the revised K-Taxonomy guidelines, it is expected that fundraising for expanding the distribution of eco-friendly vehicles will become easier."
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