By Nam Hyun-woo
Hyundai Capital Services said Thursday that its green bond had been named as Korea’s best in 2016 by The Asset, a Hong Kong-based finance magazine.
According to the company, The Asset recognized its inaugural $500 million green bonds last year as one of the best deals of the year in North Asia.
“Hyundai Capital’s green bond was the first-ever senior unsecured green bond issuance out of the auto sector globally and the deal garnered sufficient demand amid a challenging market backdrop and achieved an impressive distribution to U.S. and European investors,” an official at The Asset said.
A green bond refers to a bond issued for the sole purpose of financing projects that have a positive environmental impact. Since they were introduced in 2007 by the World Bank and the European Investment Bank, issuance of the bonds had been confined to development banks, but from 2013 companies started to issue them.
Hyundai Capital launched its green bond, which matures in five years with a coupon rate of 2.875 percent last year. The bond was to raise money for car installment financing and automotive loans from Hyundai Motor and Kia Motors eco-friendly vehicles. Hyundai Capital is a financial unit of Hyundai Motor Group.
The company is the first private Korean firm to issue a green bond. Prior to this, the state-run Export-Import Bank of Korea issued the bonds in 2013 and early 2016.
“We believe that the this recognition is due to Hyundai Capital’s efforts to achieve Hyundai Motor Group’s vision of becoming the world’s second-largest eco-friendly carmaker by 2020 through diversifying funding sources,” a Hyundai Capital official said.