LG Chem Issues $1 Billion Global Green Bond... Investment in Battery Materials and Renewable Energy

Issued Under the Lowest Ever Spread (Additional Interest Rate) Conditions for Domestic General Companies

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] LG Chem has successfully issued a green bond to accelerate ESG (Environmental, Social, and Governance) management. This green bond recorded the lowest ever spread among overseas bonds issued by domestic companies, achieving great success.

On the 29th, LG Chem announced that it had issued a global green bond worth a total of 1 billion USD (approximately 1.1 trillion KRW). Green bonds are international bonds issued and traded simultaneously in global financial markets, with proceeds strictly allocated to eco-friendly projects and infrastructure investments such as climate change and renewable energy.

This green bond was issued in US dollars (USD) and consists of two bonds: a 5-year maturity bond worth 500 million USD and a 10-year maturity bond worth 500 million USD. The 5-year bond was priced at 1.480%, which is the US 5-year Treasury Rate of 0.880% plus a 0.600%p spread, and the 10-year bond was priced at 2.380%, which is the US 10-year Treasury Rate of 1.480% plus a 0.900%p spread. This represents a 0.4%p (40bps) reduction from the initially proposed spread.

The funds raised through the green bond will be fully invested in battery materials such as cathode materials, eco-friendly plastic materials including recycled plastic, and renewable energy-related materials such as solar power.

Even after the spin-off of LG Energy Solution, LG Chem is leading the industry beyond declarative ESG management by securing about 2 trillion KRW in investment funds through ESG bond issuance in the first half of this year alone, to invest in eco-friendly projects in petrochemicals and advanced materials sectors.

LG Chem set a record as the first global chemical company to issue a global green bond worth 1.56 billion USD (1.8 trillion KRW) in 2019, and in February this year, it issued 820 billion KRW worth of won-denominated ESG bonds, establishing the largest scale of foreign currency and won-denominated ESG bond issuance among domestic general companies. With this green bond issuance, LG Chem now holds the largest cumulative record of approximately 3.7 trillion KRW in global ESG bond issuance among domestic general companies.

Chadongseok, LG Chem CFO and Vice President, stated, "We will enhance corporate value through large-scale investments in ESG fields and implement concrete measures for qualitative growth and future preparedness."

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