SK Hynix issues $1 bn sustainability-linked bonds

South Korea’s SK Hynix Inc. has raised $1 billion in sustainability-linked bonds (SLBs) to become the world's first memory chipmaker to issue such bonds, the company said on Wednesday.

It doubled the issuance amount from the originally planned $500 million thanks to stronger-than-expected interest from institutional investors.

SLBs are a type of environmental, social and governance-related bonds with their yields tied to the issuer’s sustainability performance. The proceeds are used to finance eco-friendly projects.

As a condition of the debt issue, the world’s second-largest memory chipmaker proposed a reduction in greenhouse gas emissions from its factories to 57% by 2026, compared to its 2020 levels.

It will keep investors informed annually of the progress it would make in relation to the emission reduction target through the sustainability reporting system.

Its achievement of the year-end 2026 carbon emission target will be disclosed during the first half of 2027 to adjust the bond yields accordingly.

GREEN BONDS

Separately, SK Hynix raised $750 million in green bonds to finance eco-friendly activities such as water quality management, energy efficiency improvement and air pollution reduction.

The company said the greater-than-expected demand for its new bonds reflected investor expectations of a rebound in the semiconductor industry this year and reaffirmed their trust in its efforts to fight climate change.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Yeonhee Kim edited this article