Korean state lender IBK issues $500 mn sustainable bonds at cheapest rate

South Korea’s Industrial Bank of Korea (IBK) has tapped $500 million in U.S. dollar-denominated sustainable bonds at the cheapest rate for a Korean issuer.

The state lender announced Tuesday that it issued three-year sustainable bonds at a coupon rate of 0.639 percent, 20 basis points over the corresponding U.S. treasuries.

IBK said it sold the notes at the cheapest-ever rate despite the increasing market uncertainties amid the resurgence of virus cases thanks to the investors’ high interest in socially and environmentally responsible investing.

Sustainable bond is a bond whose proceeds are used to finance a combination of green and social projects or activities. It is one of the three types of environmental, social, governance (ESG) bonds, along with green and social bonds.

The bank plans to use the proceeds to finance environmental projects and help small- and mid-sized companies and merchants who have been hit hard by the pandemic.

“The bond issuance will enhance our ability to respond to the financial market volatility and help stable management of foreign currency liquidity,” an official from the bank said. “We will continue to support policy financing by selling debts preemptively.”

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