KT Issues ESG Bonds for the First Time in the ICT Industry... 120 Billion KRW Scale
[Asia Economy Reporter Eunmo Koo] KT announced on the 31st that it plans to issue ESG (Environmental, Social, and Governance) bonds worth 120 billion KRW on the 10th of next month. The final issuance amount will be determined based on the demand forecast results on the 3rd of next month, and in addition to 3-year and 5-year maturity ESG bonds, KT plans to issue up to 300 billion KRW in corporate bonds, including 10-year maturity general corporate bonds.
KT's corporate bonds have a AAA credit rating, and the ESG bonds to be issued this time also have a AAA rating. Based on this top-tier credit rating, if demand for KT ESG bonds in the public bond market exceeds expectations, the issuance size of these ESG bonds may be increased.
ESG bonds are bonds whose issuance funds must be used for environmentally friendly projects and social value creation purposes, and are classified into ▲Green Bonds ▲Social Bonds ▲Sustainability Bonds. So far, in Korea, ESG bonds have been issued mainly by financial institutions, public enterprises, and manufacturing companies, and KT is the first company in the ICT industry to issue ESG bonds.
To issue ESG bonds, the use of funds must align with ESG objectives. KT plans to issue 'Sustainability Bonds' among ESG bonds. Sustainability Bonds are hybrid bonds combining Green Bonds for environmentally friendly projects and Social Bonds for social value creation projects. KT explained that Sustainability Bonds issuance is possible for investments related to IDC energy efficiency, real estate development projects certified with green building ratings, and support for small and venture businesses.
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Jongwook Park, Head of KT's Corporate Planning Division, said, “KT has made ESG a key management keyword this year and is issuing ESG bonds for the first time to create sustainable social value. We will establish ourselves as a leading ESG company that innovatively grows based on Digico while fulfilling environmental and social responsibilities.”
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