Shinhan Bank Issues Samurai Bonds Worth 32 Billion Yen

First Korean Financial Institution to Issue ESG Samurai Bonds

[Asia Economy Reporter Yu Je-hoon] Shinhan Bank announced on the 21st that it has issued Samurai bonds worth 32 billion yen (approximately 300 billion KRW). Samurai bonds refer to yen-denominated bonds issued by foreign companies or governments in the Japanese bond market.

With this, Shinhan Bank became the first Korean financial institution to issue Samurai bonds as Environmental, Social, and Governance (ESG) bonds, becoming the only Korean institution to issue ESG bonds in all G3 currencies (dollar, yen, euro).

The interest rates and maturities of the Samurai bonds issued by Shinhan Bank are 0.87% (2-year maturity), 0.98% (3-year maturity), and 1.33% (5-year maturity) based on yen. Despite the unstable market conditions caused by recent consecutive big rate hikes by the U.S. Federal Reserve and the Ukraine-Russia war, the company explained that the oversubscription confirmed Shinhan Bank’s high credibility in Japan.

Shinhan Bank strategically pursued fundraising in Japan, where low interest rates are uniquely maintained during the global rate hike period, enhancing funding stability and achieving ultra-low coupon rates in the 0% range, thereby reducing funding costs. The issuance of these bonds is meaningful as a benchmark for Samurai bonds issued domestically for the first time in five years, and the market evaluates that it has provided an opportunity for other domestic financial institutions to raise stable funds at low interest rates through yen funding in the future.

Meanwhile, the Samurai bond issuance was jointly underwritten by Mizuho, Nomura, and MUFG, with Shinhan Investment Corp. participating as a co-manager. A Shinhan Bank official said, "Through this Samurai bond issuance, we were able to secure foreign currency liquidity in advance and reduce funding costs," adding, "We will continue to issue ESG bonds for the social value of finance."

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