Korea Gives a $13 Billion Boost to the Global Green-Bond Boom

(Bloomberg) -- The South Korean government is considering a green bond sale abroad, in what would be the latest deal from a country that’s become one of the world’s most active issuers of the sustainable debt.

Green note issuance is booming worldwide, but even by global standards the Korean sales rush is remarkable: deals from Asia’s fourth-largest economy have surged more than five-fold to $12.9 billion this year, far outpacing the 166% increase in such sales globally, Bloomberg-compiled data show. Korean issuers are also punching above their weight in Asia, selling the most green bonds after Chinese peers.

A deal by the Korean government would come as sovereign issuers from France to Indonesia and Chile step up offerings to meet environmental goals. In Korea’s case, the impetus is President Moon Jae-in’s target of making the nation carbon neutral by 2050, and that’s encouraged issuers such as Hyundai Motor Co. and SK Hynix Inc. to sell green debt.

Sales of regular bonds are also soaring as issuers including the Philippines and Mongolia hurry to lock in low borrowing costs before inflationary pressures push up interest rates.

More sustainable debt is coming from South Korea. Mirae Asset Securities Co., one of the nation’s biggest brokerages, is marketing a three-year dollar green note. That comes after a $1 billion offering of such debt this week by LG Chem Ltd. received more than $8.5 billion of orders.

The Korean government has sent a request for proposals for a possible sale of offshore green notes, people familiar with the matter said Monday. It wouldn’t be its first: the sovereign issued its debut green and sustainability note in 2019. Korea last sold offshore notes in September, when it issued securities in dollars and euros.

Asia

Asian companies are leading a charge of dollar bond deals on Tuesday after the two sovereigns -- the Philippines and Mongolia -- from the region headlined more than $6 billion of offerings in the U.S. currency on Monday.

• There were at least eight issuers seeking to price notes in dollars including China National Bluestar Group Co. and Korea’s Mirae Asset Securities
• Renault SA priced 150 billion yen ($1.36 billion) of debt, marking its first issuance in the Samurai debt market since 2018
• In Indonesia, investors are rushing into dollar notes of companies that may be least affected by soaring coronavirus infections such as electricity and staple food firms, and that’s helping keep yield premiums down despite the grim virus outlook
• Click here for the Asia Bondwrap

U.S.

Three borrowers including South Korea’s LG Chem combined to price $2.7 billion of investment-grade bonds on Monday, kicking off what’s expected to be a relatively subdued week of issuance.

• Dealers estimate about $15 billion will price this week ahead of the July 4 holiday
• In the U.S. high-yield bond market, just one company sold bonds. MidCap Financial Issuer Trust had no trouble tightening its deal while paying zero in terms of new issue concessions, as it had the primary market all to itself

Europe

Public sector issuers may command new bond sales in Europe’s debt market this week, strengthening a solid run for the sector as countries and national agencies seek to fund the recovery from the coronavirus crisis.

• French food retailer Picard Groupe SAS is back to sell a sustainability-linked bond after scrapping plans for one in April
• UniCredit SpA sold a green bond on Monday, the last major European bank to issue ESG debt
• Primary market participants are expecting the second publicly syndicated Next Generation EU bond transaction to dominate activity this week, according to a survey conducted by Bloomberg News on June 25

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