POSCO Future M to Issue 300 Billion KRW Korean-Style Green Bonds

First Case in Battery Industry
Facility Funds for Cathode Material Plant

POSCO Future M is the first in the battery industry to issue a Korean-style green bond. Due to the strong demand forecast, the issuance scale has doubled from the initially planned 150 billion KRW to 300 billion KRW.

POSCO Future M announced on the 21st that, as of the 19th, the demand forecast attracted funds amounting to 1.06 trillion KRW, which is 7.1 times the target amount, leading to an increase in the bond issuance scale.

Aerial View of POSCO Future M Anode Material Factory

POSCO Future M plans to use all the issued funds as capital for its anode material factory (NCMA·NCA) in Pohang. This project has been classified as an economic activity for manufacturing innovative items in the greenhouse gas reduction sector, one of the six environmental goals, and thus qualified for the Korean-style green bond issuance. Accordingly, the Ministry of Environment will provide 30 million KRW in interest cost support this year.

The Korean-style green bond is a corporate bond that applies the Korean Green Taxonomy (K-Taxonomy), implemented from this year, unlike existing ESG (Environmental, Social, and Governance) bonds.

The use of the issued funds must contribute to one or more of the six environmental goals: ▲greenhouse gas reduction ▲climate change adaptation ▲sustainable water conservation ▲transition to a circular economy ▲pollution prevention and control ▲biodiversity conservation, without causing harm to other environmental goals. To promote Korean-style green bonds, the Ministry of Environment supports interest costs for issuing companies.

The bonds to be issued this time consist of 200 billion KRW with a 3-year maturity and 100 billion KRW with a 5-year maturity, all issued at interest rates lower than the individual market average rates. The 3-year bonds will be issued at 0.09 percentage points below the individual market average rate, and the 5-year bonds at 0.21 percentage points below. The final interest rates will be decided on the 26th based on the individual market average rates.

POSCO Future M analyzed that the influx of investment funds amid tightened liquidity in the capital market due to global interest rate hikes reflects a positive response based on its technological competitiveness and differentiated business competitiveness, including securing a full value chain from raw materials to material production within the POSCO Group, which will continue its growth.

Yoon Deok-il, Vice President and Head of Planning Support Division at POSCO Future M, stated, "Following the ESG bond issuance in February, this Korean-style green bond issuance once again confirmed investors' expectations and recognition not only of the company's growth potential but also of its eco-friendly business." He added, "We will continue to pursue the corporate citizenship management philosophy and the transition to an eco-friendly future materials company."

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