Pan Ocean's maiden ESG debts offering draws 8-fold institutional bids

[Photo provided by Pan Ocean Co.]

South Korean bulk carrier Pan Ocean Co. drew over eight times greater demand for its maiden ESG-themed A- debt worth 50 billion won ($44.08 million), underscoring strong appetite for green bonds and rosy maritime business prospects.

According to industry banking sources on Sunday, Pan Ocean’s 50 billion won papers dated three years pooled in bids of 403 billion won from institutions during a book-building session on Thursday last week.

Thanks to the explosive demand, the shipper was able to issue the debts at yields of 15 basis points below its desired band of 30 basis points below and above the market average of 2.062 percent, an unprecedentedly low rate in A- category.

Bias for ESG bonds has been conspicuous lately.

Fisheries company Sajo Industries Co., which held a book-building session on the same day as Pan Ocean, drew only 40 billion orders for its 20 billion won offer in A- while coal-powered plant operator Samcheok Blue Power Co.’s 100 billion won offer was entirely shunned by investors.

Rosy maritime business outlook added appeal to Pan Ocean’s papers.

Korea Ratings Corporation and Korea Investors Services Inc. raised their outlook for Pan Ocean to positive in April, citing increased proportion of short-term chartered ship contracts and new contracts signed with major consignors which bolstered its business stability. The shipper is currently offering dry cargo services with 186 dry cargo fleets, the largest in the country, on the back of recent surge in freight rates.

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