NH Nonghyup Bank Successfully Issues Social Bond Worth USD 600 Million

3.5-Year Maturity USD 300 Million 4.074%
5-Year Maturity USD 300 Million 4.318%

[Asia Economy Reporter Sim Nayoung] NH Nonghyup Bank announced on the 28th that it successfully issued a global social bond worth USD 600 million on the 27th. The bonds were issued as a dual-tranche consisting of USD 300 million each for 3.5 years and 5 years. The interest rates were set at 4.074% (3.5 years) and 4.318% (5 years), which are 90bp (1bp=0.01 percentage point) and 110bp above the US 3-year and 5-year Treasury yields, respectively.

An NH Nonghyup Bank official stated, “Despite recent market volatility due to global inflation, actively promoting the importance of being the only agricultural policy financial institution in Korea drew a positive response from overseas investors.” He added, “In particular, this issuance is a social bond among ESG bonds, and the funds raised will be used exclusively for social projects supporting socially vulnerable groups, farmers, small business owners, and SMEs.”

The credit ratings assigned to this bond issuance were A1 (Moody’s) and A+ (S&P). For the 3.5-year tranche, 112 institutions placed orders totaling USD 2.1 billion, seven times the target amount. Regionally, the distribution was 85% Asia, 14% Europe, and 1% the US, while by investor type, asset management firms accounted for 59%, banks 33%, and others 8%. For the 5-year tranche, 120 institutions placed orders totaling USD 2.1 billion, also seven times the target amount. The regional distribution was 77% Asia, 15% the US, and 8% Europe, with investor types comprising 54% asset management firms, 36% banks, and 10% others.

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