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ESG bonds

Hyundai Steel receives $1.9 bn in orders for green bonds

Jan 19, 2021 (Gmt+09:00)



South Korea-based Hyundai Steel Co. received around 2 trillion won ($1.9 billion) worth of orders in Monday's bookbuilding for its green bond issue, the company said on Jan. 19. The overwhelming orders are over eight times the expected amount of 250 billion won.

The company is considering raising the amount to 500 billion won, owing to the successful bookbuilding. Hyundai Steel is the first company within the Hyundai Motor Group, aside from its financial affiliates, to issue environmental, social and governance (ESG) bonds.

Green bonds are special-purpose bonds issued to raise funds for eco-friendly projects such as those involving renewable energy or electric vehicles.

Hyundai Steel plans to use the proceeds for eco-forward activities, such as making sizable investments to reduce greenhouse gases, as well as technology developments. The funds will also be used for the company’s planned implementation of the coke dry quenching (CDQ) system.

CDQ is a sytem that produces coke from coal materials, which is then cooled in the steel manufacturing process. Until now, Hyundai Steel used the coke stabilization quenching (CSQ) system using coolants, but the company was unable to make use of the heat waste created in the cooling process.

Hyundai Steel expects the CDQ transition to help reduce environmental risk while raising energy efficiency, as the system circulates cooled gas to suppress steam and recover heat waste.

The ESG certification for the green bond issue was conducted by Korea Investors Service, which gave Hyundai Steel the highest GB1 rating for its well-organized and highly transparent management and new operating system.

“We are boosting eco-friendly management company-wide,” said a Hyundai Steel official, adding that the issuing of ESG bonds demonstrates the company’s environmental commitment.

Write to Man-su Choe at bepop@hankyung.com

Danbee Lee edited this article.

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