First 3-Year Maturity with 4.875% Interest Rate
Since the Split of the Holding Company
POSCO announced on the 17th that it has raised $500 million (approximately 680 billion KRW) through the issuance of a 3-year global green bond. This is the first time POSCO has issued a green bond since the holding company split in 2022.
POSCO plans to invest the funds raised from this green bond issuance into the construction of an electric arc furnace at the Gwangyang Steelworks with an annual capacity of 2.5 million tons. Green bonds are special-purpose bonds restricted to use only for green industries and environmentally friendly activities.
On the 3rd, POSCO officially announced the issuance of the global bond in the Asian market and began soliciting investors.
POSCO initially offered an interest rate by adding 1.1% to the 3-year US Treasury yield. According to the demand forecast, about 200 institutions participated, placing orders totaling approximately $4 billion, which is eight times the total offering amount, POSCO reported. Asia and the US accounted for 71% and 10%, respectively, while Europe and the Middle East were allocated 19%.
Accordingly, POSCO finalized the green bond issuance size at $500 million, with a spread of 1.1% and a coupon rate of 4.875%.
To achieve its 2050 carbon neutrality goal, POSCO newly established a sustainable finance management framework in December last year.
Prior to this bond issuance, POSCO held investor briefings over four days starting from the 8th, targeting numerous global institutional investors located in the US, Europe, Hong Kong, and Singapore, explaining its ESG strategy, global steel investment plans and growth strategies, and excellent creditworthiness.
To achieve the 2050 carbon neutrality target, POSCO plans to operate the scrap input ratio in the electric arc furnace, scheduled for completion in 2026, in accordance with the steel sector standards of the internationally recognized Climate Bonds Initiative.
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