Shinbo Issues Green Asset Securitization Bonds Worth 140 Billion Won in First Half of the Year

On the 3rd, the Korea Credit Guarantee Fund announced that it plans to issue Green Asset-Backed Securities (G-ABS) worth a total of 140 billion KRW in the first half of this year to support the activation of green finance for small and medium-sized enterprises (SMEs) and mid-sized companies.

G-ABS are securitized bonds issued by incorporating corporate bonds of SMEs and mid-sized companies that meet the Korean Green Taxonomy (K-Taxonomy) as underlying assets. The Korea Credit Guarantee Fund introduced this for the first time domestically in May 2023 in cooperation with the Ministry of Environment and the Korea Environmental Industry & Technology Institute.

Last year, a total of 256.6 billion KRW worth of G-ABS were issued, and 110 SMEs and mid-sized companies received approximately 9.2 billion KRW in interest support, reducing their financing costs.

Starting this year, the Korea Environmental Industry & Technology Institute’s secondary interest subsidy period has been extended from one year to three years. In the first year, SMEs receive a 3 percentage point subsidy, and mid-sized companies receive a 2 percentage point subsidy. In the second and third years, additional support is provided within 50% of the first year’s subsidy amount. The Korea Credit Guarantee Fund plans to reduce the incorporated interest rate by 0.2 percentage points over three years to ease the burden on companies.

On the 28th of last month, the Korea Credit Guarantee Fund issued the first G-ABS of this year worth 50.5 billion KRW. The remaining amount will be additionally issued this month and next month.

A representative of the Korea Credit Guarantee Fund stated, "We will continue to actively support the issuance of G-ABS for SMEs and mid-sized companies engaged in green economic activities to contribute to the growth of the green industry."