LG Energy Solution Successfully Issues Foreign Currency Bonds Worth 2.7 Trillion Won

Employees at LG Energy Solution's Ochang plant are showcasing the Long Cell battery developed by LG Energy Solution. Photo by LG Energy Solution

LG Energy Solution has successfully issued foreign currency bonds worth $2 billion (approximately 2.7702 trillion KRW).

On the 25th, LG Energy Solution announced that the company successfully issued ▲$700 million general foreign currency bonds with a 3-year maturity, and ▲$800 million and $500 million global green bonds with 5-year and 10-year maturities, respectively.

The issuance yields were set at +100bp, +110bp, and +135bp over the U.S. 3-year, 5-year, and 10-year Treasury yields, respectively. One basis point (bp) equals 0.01%. These rates are each 30bp lower than the Initial Price Guidance. The Initial Price Guidance is the expected issuance spread announced by the issuer at the start of investor order intake.

Earlier, international credit rating agency Moody's assigned LG Energy Solution a bond credit rating of Baa1, an investment-grade rating, based on its leading position in the global battery industry and strong order backlog. A total of 285 global institutional investors participated in this foreign currency bond issuance, with orders received amounting to 4.3 times the total offering size.

Despite a temporary demand slowdown in the electric vehicle market recently, the high long-term growth potential of the market and expectations for LG Energy Solution's differentiated global production capacity are evaluated to have driven strong investor demand.

LG Energy Solution plans to use the funds raised through this foreign currency bond issuance to strengthen future competitiveness by investing in global production facilities and R&D. A portion of the funds will be used to refinance foreign currency bonds previously issued for investments in global production facilities.

Currently, LG Energy Solution operates and is constructing eight production facilities globally, including GM 1, 2, and 3 joint plants in North America, joint plants with Stellantis, Honda, and Hyundai Motor, as well as standalone cylindrical and ESS (Energy Storage System) plants in Michigan and Arizona, continuing investments to expand its global production facilities.