SK Hynix Issues $1 Billion Sustainability-Linked Bonds

Investor Interest Rises, Bond Target Issuance Increased

[Photo by SK Hynix]

[Asia Economy Reporter Kim Pyeonghwa] SK Hynix announced on the 11th that it has increased the size of its sustainability-linked bonds (SLB), initially set at $500 million (approximately 624 billion KRW), to $1 billion (approximately 1.248 trillion KRW) due to strong interest from global investors.

SLBs are bonds that adjust interest rates based on the achievement of environmental, social, and governance (ESG) management goals. Recently, SLBs have been gaining attention as a corporate sustainability management strategy in the global market.

SK Hynix initially set the target issuance amount for SLBs at $500 million. However, with overwhelming interest from numerous investors, mainly 304 institutions, the issuance size was increased to $1 billion.

SK Hynix stated, “We view the large-scale investment during the semiconductor downturn positively,” and explained, “With forecasts of a rebound in the semiconductor market this year and global investors’ trust in our commitment to climate change response embedded in the bonds, we successfully issued the SLBs.”

SK Hynix is the first global memory semiconductor company to issue such bonds. Prior to issuance, the company conducted verification with global certification agencies Moody’s and DNV regarding its previously established ESG goals. These agencies evaluated the company’s goals as challenging and expected a high contribution to sustainable management upon achievement.

As a condition of the bond issuance, SK Hynix set a target to reduce greenhouse gas Scope 1 and 2 emission intensity by 57% by 2026 compared to 2020 performance. Greenhouse gas emission intensity refers to the amount of greenhouse gas emitted per unit of memory semiconductor production capacity (bit). Scope 1 greenhouse gases are those directly emitted during the product manufacturing stage. Scope 2 refers to indirect emissions from greenhouse gases generated when producing electricity or steam used at business sites.

SK Hynix will transparently disclose the greenhouse gas reduction performance against targets annually through the Sustainability Reporting System (SRS). After 2026, the final achievement level will be measured and disclosed in the first half of the following year, and interest rates will be adjusted accordingly. Kim Woo-hyun, Vice President (CFO) of SK Hynix, said, “We will continue to lead ESG management and strive to enhance both economic value (EV) and social value (SV).”

Meanwhile, SK Hynix also issued $750 million (approximately 879.8 billion KRW) worth of green bonds alongside the SLBs. Green bonds are special-purpose bonds that can only be used to raise funds for environmentally friendly investments. SK Hynix plans to invest the funds raised through green bonds in eco-friendly projects such as water quality management, energy efficiency, pollution prevention, and ecological environment restoration.

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