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POSCO Chemical Issues Its First ESG Bonds
2022.04.08
- POSCO doubled the bonds originally planned as a result of demand forecasting, attracting investment for rosy growth prospects.
- Was recognized for its efforts in promoting ESG and earned the highest rating of ‘GB1’ in a green bond assessment.
POSCO Chemical issues the first ESG bonds.
POSCO Chemical announced on March 8 that they are issuing KRW 300 billion in ESG bonds to raise funds for the battery materials business.
According to the demand forecast that had been conducted up until March 6, as much as KRW 800 billion was raised thanks to POSCO Chemical’s future growth potential and high credibility rating (AA-). Hence, POSCO Chemical decided to double the corporate bonds from the originally planned KRW 150 billion.
POSCO Chemical plans to use the funds to expand the manufacturing facilities to have an annual capacity of 30,000 tons each in ZPHE’s cathode company, and ZHPE, a precursor company, as joint ventures with Huayou Cobalt of China.
ESG bonds are debt instruments issued to encourage investments by addressing certain environmental, social, and governance criteria. They are divided into green bonds, social bonds, and sustainability bonds depending on their intended purpose. POSCO Chemical is issuing green bonds to attract funds for its eco-friendly business.
Prior to issuing the bonds, POSCO Chemical earned the highest rating of “GB1” in the “ESG Financial Certificate Evaluation” by the Korea Investors Service for the environment-friendliness of the company’s battery materials business and transparency in fund management. The company was evaluated as having made efforts to reduce carbon emissions in the manufacturing process by acquiring the Environmental Product Declaration and Recycle Resource Quality Declaration certificates and using renewable energy. POSCO Chemical was also praised for its outstanding ESG activities, by strengthening the management of responsible minerals and conducting social contribution activities for the vulnerable groups in the society.
The bonds issued are comprised of three-year bonds worth 200 billion won and five-year bonds worth 100 billion won. The interest rate for the three-year bonds is 0.03%p lower than the average interest rate suggested by private credit rating agencies, while the interest rate for the five-year bonds will be the average interest rate. The fixed interest rate will be determined by reflecting the average interest rate on April 13.
* Average interest rate : The average interest rate suggested by private credit rating agencies.
Joo-hyun Kim, CFO and the Head of Planning and Support Division at POSCO Chemical, said, “POSCO Chemical was able to issue green bonds as the company was recognized for its future growth potential and eco-friendliness of its battery materials. We will use the funds to expand investment in the battery materials business and strengthen our environmental management with an aim of achieving carbon neutrality.”