À̹ÌÁö È®´ë The South Korean government has begun gauging appetite for new dollar-denominated sovereign bonds on Wednesday, including its first debt offering for green and sustainability design.
The Ministry of Economy and Finance said on Wednesday that it will issue 5-year green or sustainability bonds and 10-year in straight bonds in U.S. dollar denomination. The exact scope of offering and yields will hinge on book-building sessions, it added.
This year¡¯s ceiling on overseas issue in sovereign debt for foreign exchange stabilization is at $1.5 billion.
Citigroup, Credit Agricole CIB, Hong Kong and Shanghai Banking Corporation (HSBC), and J.P. Morgan are joint underwriters.
The government in September last year drew $1 billion in dollar-denominated notes in 10 and 30 year maturity at sharply lower-than-expected rates due to record-high demand of 5.7 times against offering.
It would be packaging its first green and sustainability bonds in which proceeds are used to fund environmentally-friendly and socially sustainable projects in the new offering.
The government took into consideration of how there has been increasing issuance of green bonds globally as well as demand.
¡°There is a growing trend globally in issuing green and sustainable bonds,¡± said an unnamed official from the finance ministry. ¡°Given that there are investors interested particularly in these [green] bonds, [we] expect to be able to expand investor base and partly lower bond yield.¡±
The official also noted how the move is in line with Korea Investment Corporation (KIC) – the ministry¡¯s entrusted company – has been expanding investment in environmental, social, and governance criteria. The move will also set a benchmark for financial institutions that have been eager to issue sustainable bonds recently.
By Sohn Il-seon and Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]