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Corporate bonds

POSCO raises €1.1 bn in convertible green bonds

The zero-coupon bonds can be converted into POSCO shares at a 40% premium of Friday's level

By Aug 15, 2021 (Gmt+09:00)

POSCO raises €1.1 bn in convertible green bonds

POSCO Co., the world's fifth-largest steelmaker, has raised €1.1 billion ($1.3 billion) through green bonds convertible into its common shares, marking the largest-ever amount of convertible bonds sold by a South Korean company.

The zero-coupon bonds with a maturity of five years were sold at a yield of minus 0.78% on Aug. 13, according to POSCO.  

POSCO will spend the proceeds to expand its rechargeable battery materials and hydrogen businesses. Green bonds, a type of environmental, social and governance bonds, are issued to fund eco-friendly projects such as those involving renewable energy or electric vehicles (EVs).

The bonds can be changed into POSCO shares at 477,400 won ($408) apiece, or a 40% premium of Friday’s closing level of 341,000 won, between October this year and August 2026. Otherwise, they will be redeemed in cash at maturity.

For the bond issuance, POSCO offered 2.9 million shares held by itself, or 3.4% of its outstanding shares 

JPMorgan, BNP Paribas and HSBC were joint bookrunners.

The bond sale is part of POSCO’s long-term goal to become the world’s top player in the EV battery materials market by 2030, by establishing a supply chain from raw materials procurement to production of battery materials.

A slew of other South Korean companies have been issuing green bonds to finance their production of EV batteries and relevant materials.

In 2019, LG Chem Ltd., the country's largest EV battery maker, became the world’s first chemical company to issue green bonds, through which it secured $1.56 billion.

In June of this year, it raised another $1 billion through global green bonds. At the time, the fixed-rate bonds were sold at the narrowest spread with US treasury yields among the notes issued by South Korean companies, excluding state-run agencies.

Write to Jung-hwan Hwang at

Yeonhee Kim edited this article.

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