Shinhan Card Issues $400 Million Foreign Currency Social Bond... "First Among Card Companies"

The Industry's First Foreign Currency Public Bond Issuance Since the 2008 Financial Crisis

[Asia Economy Reporter Ki Ha-young] Shinhan Card announced on the 15th that it has issued a social bond worth 400 million dollars (approximately 459 billion won) in a public offering, the first in the industry.

This overseas public bond, issued as the first foreign currency social bond by a card company, is the first in 13 years and 5 months since May 2007. It is evaluated as pioneering a new path in the global bond market by successfully issuing foreign currency public bonds for the first time among card companies since the 2008 financial crisis.

Social bonds are special-purpose bonds issued to solve social issues such as supporting small and medium-sized enterprises, creating jobs, and assisting vulnerable groups, and refer to Environmental, Social, and Governance (ESG) bonds.

Although this subscription was practically a new issuance in the global bond market, it received high interest from investors. About 82% of the orders came from Asia, and the remaining 18% from Europe and the Middle East, with 100 institutional investors worldwide participating, resulting in orders exceeding 1.5 billion dollars, approximately 3.8 times the amount raised.

The credit rating is also at the highest level in the industry. Based on Shinhan Card's status as the number one card company in Korea and its excellent financial soundness, it received an 'A2' rating from Moody's and an 'A-' from S&P. The final spread was set at 107.5 basis points, 32.5 basis points lower than the initially proposed spread, thanks to the successful reception. When converted to Korean won, the total funding cost is in the mid-1.2% range, which is a low level comparable to a 2-year domestic card bond. The raised funds will be used to support low-income groups struggling due to the COVID-19 pandemic.

This bond will be listed on the Singapore Exchange, with BNP Paribas, Citi, SC, and HSBC as lead managers, and DBS and MUFG participating as co-managers.

A Shinhan Card official said, "Despite the increased volatility in domestic and international financial markets due to the novel coronavirus (COVID-19), we have achieved successful fundraising in the global bond market, enhancing our international recognition and expanding our investor base."

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