Korea Development Bank Issues $300 Million Green Bond For Renewable Energy Projects

The Korea Development Bank has issued its first green bond aimed at funding implementation and expansion of renewable energy projects.

The Bank raised $300 million from investors in Asia, Europe, and the United States and offered “quarterly floating rate coupon of 3-month USD LIBOR plus 0.725% per annum to a maturity date of 6 July 2022.” Proceeds from the bond will be targeted at wind, solar, and biomass power projects.

Being a government-backed institution, the Bank’s bond issue was hugely popular among global investors who were willing to invest up to $650 million against the bond size of just $300 million.

Asia was allocated 46%, European accounts purchased 18%, while US-based accounts purchased the remaining 36%. By investor-type, bank treasuries took 32% of the issuance, fund managers 26%, central bank/sovereign wealth fund/agency 23%, pension 14%, private banks and others 5%.

Korea may not be a buzzing market in the global green bonds market, but it has seen some significant bond issues. Last year, the Export Import Bank of Korea issued a green bond, the first in three years, to raise $400 million. That issue, too, over-subscribed by about three times with investors willing to pour in $1.1 billion.

Hyundai Capital Services issued a unique green bond that aimed at providing debt finance to consumers buying hybrid vehicles. The $500 million bond issue attracted investment offers of $1.2 billion with more than half the investors hailing from non-Asian countries. The bond was named as the best in North Asia in 2016.