Kia scales up maiden USD green bond to $700 mn upon high demand

[Photo provided by Kia Corp.]

South Korea’s Kia Corp. marketed its maiden green bond worth $700 million in greenback denomination, scaled up from its $500 million scheme on strong institutional demand for the first environmental-themed USD bonds from an Asian issuer.

According to sources from the investment banking industry, Kia issued a total $700 million in green bonds in 3 and 5.5-year maturities.

The dollar-denominated bonds with 3-year maturity were priced at 75 basis points over the U.S. treasury of the same maturity for a fixed coupon rate of 2.41 percent. Bonds with 5.5-year maturity were issued at a fixed coupon of 1.76 percent, 90 basis points above U.S. 5-year government bond yield. The spreads were respectively 35 basis points below the company’s initial guidance thanks to overwhelming demand of $2.65 billion for the 3-year offering and $2.3 billion for 5.5-year during the book-building session on Monday.

The debts received Baa1 rating from global credit rating agency Moody’s and BBB+ from S&P. Book runners included Bank of America, Standard Chartered Securities, Citigroup Global Market Security, and HSBC.

The new offering marks Kia’s second ESG-themed offering. Early this year, it sold its first Korean won-denominated green bonds worth 300 billion won ($267.14 million). Kia will use the proceeds to finance green car development projects, it said. It is also its first global bond since last issue in 2017.

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