NongHyup Bank Successfully Issues $600 Million Agricultural Support Social Bond

5-Year Bond, 4.95% Interest Rate

NH Nonghyup Bank announced on the 27th that it successfully issued an Agriculture Supportive Social Bond, an ESG (Environmental, Social, and Governance) bond supporting agriculture, worth USD 600 million on the 26th.

Social bonds are a type of ESG bond specifically designated for raising funds to address social issues. This Agriculture Supportive Social Bond will be fully utilized to provide financial support to farmers and the agricultural sector with the aim of creating social value.

The bond was issued with a 5-year maturity and received credit ratings of A1 from Moody's and A+ from S&P. The interest rate was fixed at 4.95% (5 years), which is the US 5-year Treasury yield plus 98 basis points (1bp = 0.01 percentage points).

This deal attracted strong interest from overseas investors, receiving orders totaling USD 2.5 billion, four times the amount offered, from 162 institutions. By region, the distribution was 74% Asia, 17% United States, and 9% Europe. By investor type, asset management companies accounted for 49%, banks 34%, insurance companies 13%, and others 4%.

An official from Nonghyup Bank stated, “Despite increased market volatility due to recent announcements of additional US interest rate hikes, we successfully completed the bond issuance, recognized by overseas investors for our stability as the only domestic agricultural policy financial institution, as well as our asset soundness and profitability.”

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