NH NongHyup Bank Issues $600 Million Global Agricultural Support Social Bond

"Lowest Spread Since Bank's Establishment"
Achieved Through Dual-Tranche Structure and Strong Global Investor Demand

NH NongHyup Bank announced on July 15 that it has successfully issued a global agricultural support social bond worth $600 million (approximately 824.8 billion KRW). A social bond is a type of environmental, social, and governance (ESG) bond, which is a special-purpose bond where the funds raised are restricted to projects addressing social issues.

This global bond was issued in a dual-tranche structure, consisting of $300 million with a 3.5-year maturity and $300 million with a 5-year maturity. The 3.5-year tranche (floating rate) was set at SOFR plus 68 basis points, while the 5-year tranche (fixed rate) was set at 4.501%, which is the same-maturity U.S. Treasury yield plus 50 basis points (1bp = 0.01 percentage point).

According to NH NongHyup Bank, this issuance marks the lowest spread since the bank’s establishment. The result was attributed to the dual-tranche (floating/fixed) structure that reflected global investor demand and the bank’s efforts to build investor trust through regular public bond issuances.

Thanks to strong interest from high-quality investors, NH NongHyup Bank attracted total investment demand of $6.4 billion, which is up to 10.7 times the offering amount. The spread was tightened by 42 basis points for the 3.5-year tranche and 40 basis points for the 5-year tranche compared to the initial price guidance, resulting in a lower spread than comparable bonds in the market. The proceeds will be used to provide financial support to farmers and the agricultural sector with the aim of creating social value.

An NH NongHyup Bank official stated, "This issuance is especially meaningful as it was achieved amid the ongoing impact of U.S. tariff policies and unresolved geopolitical risks," adding, "We successfully completed the bond issuance, having been recognized by overseas investors for our stability, profitability, and asset soundness as the only agricultural policy financial institution in Korea."

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