Shooting for the Environment... BNK Busan Bank Issues 100 Billion KRW in Green Bonds for New Capital Securities

The First Korean-Style Green Bond Issued by Banks

Fixed Annual Interest Rate at 4.37%

BNK Busan Bank (President Bang Seong-bin) has issued 100 billion KRW of a new type of capital securities themed around the environment, called 'Green Bonds.'

Busan Bank announced on the 30th that it issued 100 billion KRW of Korean-style green bonds with a 5-year callable option at an interest rate of 4.37% per annum on the 29th.

During the demand forecast for bond issuance on the 18th, the bank successfully attracted a total demand of 336 billion KRW, more than three times the issuance amount.

With the successful demand forecast, the issuance interest rate was fixed at 4.37% per annum, and on the same day, the government bond yield was set at 3.49%, resulting in a spread of 0.88 percentage points.

The 0.88% spread on Busan Bank's new capital securities is the lowest ever for a regional bank, and the spread difference with commercial banks that issued bonds just before was only 0.03%, which is evaluated as significantly narrowing the gap with commercial banks in the capital market.

Busan Bank actively communicated with the underwriting group (Hanyang Securities, Kyobo Securities, Hana Securities, Hyundai Motor Securities) to issue the new capital securities as Korean-style green bonds for the first time in the banking sector.

Additionally, by adopting a monthly interest payment schedule, it attracted the attention of both institutional and retail investors.

The funds raised through this green bond issuance will be used to support environmental improvement facility funds such as waste treatment facilities and air pollution prevention facilities.

Kim Cheong-ho, Head of the Treasury Market Division at Busan Bank, said, “Despite the difficult environment, including the recent sharp rise in exchange rates due to Middle East war risks, we succeeded in raising an amount exceeding market expectations,” adding, “We will become a trusted bank in the market through proactive capital expansion and stable ratio management.”