Demand Forecast Success... Exceeding Target by Twice
Interest Cost Reduction through Green Bond Issuance
3-Year Bonds 480 Billion, 5-Year Bonds 120 Billion
POSCO Future M announced on the 24th that it has issued corporate bonds worth 600 billion KRW to repay debt and construct an anode material factory in Gwangyang, Jeollanam-do.
Following the demand forecast conducted on the 16th, POSCO Future M received demand of 835 billion KRW, nearly three times the planned amount, leading to a decision to double the originally planned issuance of 300 billion KRW.
The final issuance scale consists of 480 billion KRW in 3-year bonds and 120 billion KRW in 5-year bonds, with interest rates set at 3.484% for the 3-year bonds and 3.593% for the 5-year bonds. This marks the lowest interest rate since September 2021 for raising funds.
Korean-style green bonds are bonds supported by the Ministry of Environment to encourage eco-friendly economic activities. Through this green bond issuance, POSCO Future M will receive up to 300 million KRW in interest cost support, reducing its financial burden.
POSCO Future M plans to use the raised funds to repay debts maturing in the second half of the year and to finance the construction of the Gwangyang NCA anode material factory with an annual production capacity of 52,500 tons, which is currently under construction.
Panoramic view of POSCO Future M cathode material factory in Yulchon 1 Industrial Complex, Gwangyang, Jeonnam [Photo by POSCO Future M]
POSCO Future M analyzed that "the success of this demand forecast was due to high interest in green bonds as well as investors recognizing the continued growth potential of the battery industry despite the electric vehicle chasm."
The three domestic credit rating agencies?Korea Ratings, Korea Investors Service, and NICE Investors Service?maintained POSCO Future M’s credit rating at 'AA- (stable)' by highly evaluating the business stability based on a diversified business portfolio and global top-tier customers. The agencies forecast that POSCO Future M will sustain growth and improve profitability due to securing large-scale orders through mid- to long-term supply contracts, an increasing proportion of high value-added high-nickel anode materials, and stable raw material costs in the future.
Jung Dae-hyung, Head of Corporate Planning at POSCO Future M, said, "The success of this demand forecast proves investors’ strong confidence in the company’s growth potential and business competitiveness," adding, "We will continue to pursue investments for business growth through efficient fundraising."
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