Hyundai Capital Issues 230 Billion KRW Sustainable Won Bonds... First Domestic Capital Company to Do So

Procurement funds to support vulnerable groups' finance,
used for Hyundai Kia eco-friendly car installment finance service

[Asia Economy Reporter Ki Ha-young] Hyundai Capital announced on the 11th that it has issued the first Korean won sustainable bond among domestic capital companies.

This Korean won sustainable bond, issued to domestic institutional investors, has a maturity of 2.5 to 10 years and a total size of 230 billion KRW. Hyundai Capital plans to use the funds raised from this bond issuance for Hyundai Kia Motors' eco-friendly vehicle installment financing services and financial support for vulnerable groups facing liquidity difficulties due to the novel coronavirus infection (COVID-19).

Hyundai Capital has operated auto finance products that can reduce the burden on users and has taken the lead in promoting eco-friendly vehicles. These socially contributive activities attracted investors' interest, resulting in an issuance size larger than the initially planned 200 billion KRW. Additionally, based on excellent internal fundamentals and smooth market communication, they successfully issued long-term bonds with a 10-year maturity.

Financial affiliates of Hyundai Motor Group are gradually expanding their roles as regular suppliers in the domestic ESG bond market. Last year, Hyundai Capital issued a 500 billion KRW Korean won green bond, the first among domestic specialized credit finance companies, followed by Hyundai Card issuing a 240 billion KRW green bond, totaling 740 billion KRW in ESG bonds issued.

Sustainable bonds are special-purpose bonds that combine social bonds and green bonds. Their use of funds is restricted to solving social issues or eco-friendly projects. In terms of issuance size, as of the end of last year, it reached approximately 29.2 trillion KRW, which is more than 49 times the amount compared to 2018 when the Korea Development Bank first issued Korean won bonds. Especially this year, social bond issuance has significantly increased due to the economic situation caused by COVID-19 becoming a major issue.

A Hyundai Capital official said, "Through a total of three issuances, we have established a leading position as a regular issuer of ESG bonds," adding, "We will strive to expand the base of the domestic ESG bond market through continuous issuance in the future."

This content was produced with the assistance of AI translation services.