Shinhan Card to issue $300 mn in dollar bonds; first such issue in 13 years

Shinhan Card Co. is set to issue $300 million (about 340 billion won) worth of dollar bonds at the end of this month for overseas investors, according to the investment banking industry on Oct. 6.

It will be the first time in 13 years for the South Korean credit card company to issue dollar bonds abroad -- the last was in May 2007. The company began preparations for the bond issue after it was rated A2 by global credit rating agency Moody's.

The dollar bonds will be issued as environmental, social, and governance (ESG) bonds. The company plans to use the proceeds to support small business owners hit hard by the global pandemic.

Market watchers say that Shinhan Card will have no trouble with demand as it is the country's No.1 credit card company. As of late June, the company had over 21 million cardholders and nearly 2 million affiliate outlets.

Thanks to its market dominance, Shinhan Card posts over 500 billion won in annual net profits. The company posted 301.9 billion won in net profit in the first half of this year, an 11.6% year-on-year increase.

Korean companies have been easing back into the global bond market as it stabilizes, recovering from the coronavirus impact. Strings of domestic companies abandoned their plans to issue dollar bonds around the peak of COVID-19 in March.

Since then, the global bond market has steadily recovered thanks to major economies rolling out robust stimulus measures. Entering the second half of this year, privately held Korean companies, such as energy company GS Caltex Corporation, brokerage firm Mirae Asset Daewoo Co., and Tongyang Life Insurance Co., succeeded in issuing bonds abroad on favorable terms.

Also, domestic companies’ issues of ESG bonds have almost doubled to 5.7 trillion won ($4.9 billion) so far this year from the year-earlier period, with a broader range of companies participating in the sustainable bond market.

Write to Jin-sung Kim at jskim1028@hankyung.com