IBK Industrial Bank, Issuance of 500 Billion KRW New ESG Capital Securities

Record Largest Issuance Scale, Lowest Additional Interest Rate Applied
Second ESG Bond This Year Following Last Month's Won-Denominated SME Financial Bonds

[Asia Economy Reporter Park Sun-mi] IBK Industrial Bank announced on the 11th that it has issued KRW 500 billion worth of conditional won-denominated ESG (Environmental, Social, and Governance) hybrid capital securities in the form of social bonds.

The newly issued hybrid capital securities represent the largest issuance in the bank's history, consisting of KRW 200 billion in perpetual bonds with a 5-year call option and KRW 300 billion in perpetual bonds with a 10-year call option. The interest rates are 2.65% for the 5-year call option (5-year government bond + 105 basis points) and 3.11% for the 10-year call option (10-year government bond + 108 basis points). These are the lowest spreads applied to hybrid capital securities issued in the domestic market.

The funds raised through the bond issuance will be used to support small business owners and SMEs facing operational difficulties due to the prolonged COVID-19 pandemic. Following last month's issuance of won-denominated SME financial bonds, which received the highest ESG certification grade for the first time in the banking sector, IBK is strengthening its ESG management efforts through the issuance of won-denominated hybrid capital securities.

An IBK official stated, “By issuing hybrid capital securities with the largest scale and lowest spread in history, we have further strengthened capital stability,” adding, “We will continue to proactively expand capital to enhance policy finance support.”

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