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Published on January 18th, 2017 | by Saurabh


Hyundai Capital Green Bond For Hybrid Cars Named “North Asia’s Best”

January 18th, 2017 by  

Hyundai Group’s push for hybrid cars through innovative measures has been recognized.

A Hong Kong-based financial magazine, The Asset, has named a green bond issued by Hyundai Capital Services last year as the best in the North Asia.

“Hyundai Capital’s green bond was the first-ever senior unsecured green bond issuance out of the auto sector globally and the deal garnered sufficient demand amid a challenging market backdrop and achieved an impressive distribution to U.S. and European investors,” Korea Times quoted an official from The Asset magazine.

Hyundai Capital Service issued green bonds worth $500 million in March of last year. The bond matures in 5 years and has a coupon rate of 2.875%. The proceeds from the green bond will be used to finance car loans for hybrid cars.

The green bond issue attracted significant interest from global investors. Hyundai Capital Services received orders for $1.2 billion in investment against the bond issue of $500 million. Around 53% of the investors were from the US and Europe, Middle East and Africa, while the rest were from Asia.

Fund managers were the largest buyers in the bond issue, comprising of 45% of the total investors. Banks and corporates represented 19% and 15%, respectively, of the total investors. Private banks comprised of 13% of the investors while the balance of 9% were pension funds and insurance companies.

This is only the third green bond issued by an entity in South Korea. The Export-Import Bank of Korea (Kexim) raised $400 million in February of last year, offering investors bonds for a 5-year period with semi-annual coupon rate of 2.125%. The offer met with overwhelming response from prospective investors who were willing to pour in $1.1 billion, or about three times the offer size.

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