POSCO Future M to issue first Korean green bond in battery industry

POSCO Future M Co. logo [Courtesy of POSCO Future M]

POSCO Future M Co., formerly POSCO Chemical, said on Friday that it will issue 300 billion won ($225.6 million) worth of Korean green bonds, the first in the local electric vehicle battery industry.

POSCO Future M plans to use the proceeds of the issuance to finance facility operation at its Pohang cathode plant. Unlike existing ESG bonds, the green bond is a corporate bond subject to a Korean green taxonomy implemented this year.

POSCO Future M doubled the size of its originally planned bond sale, attracting 1.06 trillion won, or 7.1 times the original amount, during a bookbuilding session on Wednesday thanks to the high growth of its battery materials business and its high credit rating of AA-.

The new issuance consists of 200 billion won bonds with a three-year maturity and 100 billion won with a five-year maturity. All these bonds will be issued at lower coupon rates than the average quoted by private bond rating companies.

Specifically, the three-year bonds will be issued at 0.09 percentage points lower than the average, and the five-year bonds at 0.21 percentage points lower. The coupon rates will be finalized by reflecting the average on April 26.