LG Elec nearly doubles maiden ESG debt issue on overwhelming demand

2021.04.29 13:47:41 | 2021.05.07 13:34:59

[Photo by Park Hyung-ki]이미지 확대

[Photo by Park Hyung-ki]

South Korea’s household electronics name LG Electronics Inc. scaled up its maiden ESG-themed AA0 debt to 530 billion won ($478 million) after its offering of 300 billion won drew over $1 billion institutional bids.

The company said in a regulatory filing on Thursday, it will offer 530 billion won worth bonds in multi-tranche as 1.39 trillion won worth bids were placed during book-building session on Tuesday.

The issuer’s first environment, society and governance (ESG)-themed bonds were met with particularly strong demands from big pension funds and major institutions like banks and insurance companies.

Upon explosive demand, the company diversified the offering to five-year, 10-year and 15-year bonds. Following the adjustment, the bonds were offered in four tranches—120 billion won in a five-year maturity, 70 billion won in seven-year bonds, 230 billion won in 10-year notes and 110 billion won in 15-year bonds.

The five-year note was priced at three basis points below the market yield of the same maturity, the seven-year paper at five basis points below, the 10-year bonds 10 basis points below and the 15-year note 10 basis points below the market yields.

LG Elec’s new issue of AA0-rated debts drew heated demand on the back of possible upgrade in rating by S&P, closure of its money-losing mobile phone business, and positive outlook for its core business divisions, an industry source said.

LG Electronics has decided to set up an ESG committee and an internal trading committee to strengthen its governance and climate control commitments.

Other family units under LG Group, including LG Chem and LG display have also announced they will launch ESG committees for sustainable business management.

By Ahn Gab-seong and Lee Soo-min

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