Hyundai Capital Issues 200 Billion Won in Sustainability-Linked Bonds

[Financial News] Hyundai Capital announced on the 18th that it has successfully issued a total of 200 billion won in 'Sustainability-Linked Bonds (SLB)'.
SLB is a type of ESG (Environmental, Social, and Governance) bond. Hyundai Capital has been issuing sustainability-linked bonds annually since it first issued them in the domestic public bond market in July 2023. The bonds issued this time are composed of a single tranche with a 3-year maturity. The joint lead managers are Kiwoom Securities and KB Securities. The issuance scale has been expanded more than twice compared to the previous year, and the cumulative issuance amount over three years has exceeded 500 billion won.
SLB has the characteristic of changing bond structure depending on the achievement of ESG management goals. The issuer sets sustainability goals in advance, and if these are not achieved, a certain level of premium is provided to investors. Above all, unlike other ESG bonds, this bond verifies the achievement of goals through post-management, preventing greenwashing, and is actively issued in the United States and Europe.
Hyundai Capital has set a target to have the proportion of eco-friendly vehicles in the total number of new car installment and rental products handled over three years until the end of 2027, to be more than 3.0%p higher than the domestic sales proportion of eco-friendly vehicles of Hyundai Motor Group. If this target is not achieved, Hyundai Capital plans to provide an additional annual premium of 0.02%p (2bp) to investors during the investment period. Through this bond issuance, Hyundai Capital aims to support the expansion of eco-friendly vehicle sales in line with Hyundai Motor Group's ESG strategy and to strengthen its role as a leader in green finance.

coddy@fnnews.com Ye Byeong-jeong Reporter