KDB $300m green bonds oversubscribed

Korea Development Bank has issued its first green bond, a $300 million offering that was close to 2.2 times oversubscribed. 

About 46 percent of the offering went to Asia-based investors, with European accounts purchasing 18 percent and US-based investors acquiring the remaining 36 percent, according to KDB. The institution said it had received orders totalling over $650 million across 50 accounts.

By investor type, bank treasuries took 32 percent of the issuance while fund managers bought 26 percent. Central banks, sovereign wealth funds and agencies together acquired 23 percent, while pension funds contributed 14 percent. Private banks and others took the remaining 5 percent. 

The offering’s net proceeds will be used to finance or refinance projects related to the development, construction or expansion of new or existing renewable energy facilities, including wind, solar and biomass. KDB said it will release information regarding the allocation of green bond proceeds on an annual basis on its website. 

The floating-rate, senior unsecured bonds, due 2022, had been rated Aa2 by Moody’s, AA by Standard & Poor’s and AA- by Fitch. The bonds, to be listed on Singapore’s stock exchange, will pay a quarterly floating rate couple of 3-month USD LIBOR plus 0.725 percent per annum. 

The Korean institution has been active in project finance since 1995, engaging in a wide range of infrastructure sectors including transport, social infrastructure as well as privately funded power generation such as coal-fired, combined-cycle power and renewables projects. 

Over the last year, KDB completed financial arrangements worth 7.3 trillion won ($6.38 billion; €5.58 billion) for 41 projects in the domestic project finance market across all sectors. Key transactions included the provision of 1.3 trillion for a private investment project on the Daegok-Sosa Double Track Subway in April 2016, it said in its 2016 annual report.