Korean Air Expands ESG Bonds to 350 Billion KRW... Introducing Eco-Friendly Aircraft

[Asia Economy Reporter Dongwoo Lee] Korean Air has increased the scale of its ESG (Environmental, Social, and Governance) bonds, the first issued by a domestic airline, to 350 billion KRW.

Korean Air announced on the 1st that it will issue three unsecured corporate bonds worth 70 billion KRW, 136 billion KRW, and 144 billion KRW on the 7th of this month. The maturities of the total 350 billion KRW corporate bonds are 1 year and 6 months, 2 years, and 3 years, respectively.

Korean Air initially planned to issue corporate bonds worth 200 billion KRW, but increased the issuance amount due to strong demand. It is reported that there were purchase orders exceeding 580 billion KRW in the demand forecast (pre-subscription) conducted for institutional investors.

The corporate bonds issued by Korean Air are ESG bonds, which require the use of the raised funds for eco-friendly projects and creating social value.

Korean Air plans to use the funds raised from the ESG bonds to introduce next-generation eco-friendly aircraft. It will additionally introduce the Boeing 787-10, which has 25% higher fuel efficiency per seat compared to other aircraft of the same class.

Korean Air’s credit rating is BBB+, classified as non-investment grade corporate bonds below A grade, but it has successfully issued corporate bonds consecutively after lowering its debt ratio through a 3.3 trillion KRW paid-in capital increase in March this year.

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