SEOUL, South Korea--(BUSINESS WIRE)--Korea Development Bank (“KDB”) issued and priced U.S.$300 million in aggregate principal amount of floating rate senior unsecured green bonds due 2022 (the “Green Bonds”) yesterday. This was KDB’s inaugural green bond offering and the issue was priced early in the New York trading day and received demand from accounts across Asia, Europe and the United States. Bank of America Merrill Lynch, Crédit Agricole CIB and HSBC acted as the joint bookrunners in the offering.
The Green Bonds pay a quarterly floating rate coupon of 3-month USD LIBOR plus 0.725% per annum to a maturity date of 6 July 2022. The final order size was over U.S.$650 million across 50 accounts (close to 2.2 times over-subscription). Asia was allocated 46%, European accounts purchased 18% while US based accounts purchased the remaining 36%. By investor-type, bank treasury took 32% of the issuance, fund managers 26%, central bank/sovereign wealth fund/agency 23%, pension 14%, private banks and others 5%.
KDB is a South Korean government-owned financial institution pursuant to The Korea Development Bank Act, as amended (the “KDB Act”) and it has been the leading bank in the nation with respect to supplying of industrial capital to assist the nation’s economic growth and development.
The Green Bonds have been (i) registered with the Securities and Exchange Commission and offered to investors in the United States under Schedule B of the Securities Act of 1933, as amended (the “Securities Act”) and (ii) offered to investors outside of the United States in compliance with Regulation S under the Securities Act. The Green Bonds are rated Aa2 by Moody’s, AA by Standard & Poor’s and AA- by Fitch and will be listed on Singapore Exchange Securities Trading Limited.
An amount equal to the net proceeds of the Green Bond(s) will be allocated toward financing or refinancing projects related to the development, construction, or expansion of new or existing renewable energy related facilities, including solar, wind and biomass projects, that (i) have had a disbursement made during the two years preceding the issue date of the Green Bond, (ii) will be committed to prior to the issue date of the Green Bond but financed following the issue date of the Green Bond or (iii) will be committed to and financed after the issue date of the Green Bond (“Eligible Green Projects”).
With respect to use of proceeds of the Green Bonds, KDB plans to include information regarding the allocation of Green Bond proceeds on an annual basis in an investor newsletter, which will be available on KDB’s website. Such information will include amounts allocated to Eligible Green Projects, a brief description of selected projects and where feasible, the environmental impact of such projects on a per project or project portfolio basis.
This press release has been prepared solely for informational purposes and is not intended to be distributed to or reviewed by anyone other than you. It is not an offer, recommendation or solicitation to buy or sell, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification of such securities under the securities laws of any such jurisdiction. A registration statement relating to securities has been filed with the U.S. Securities and Exchange Commission and has become effective. A written prospectus including any prospectus supplement for the offering meeting the requirements of Section 10 of the Securities Act of 1933 (other than a free writing prospectus as defined in Securities Act Rule 405) may be obtained from HSBC Securities (USA) Inc. at 52 Fifth Avenue, New York, NY 10018 United States of America.