Hyundai Card Issues First Dual-Currency Kimchi Bond in USD and CNY Among Specialized Credit Finance Companies
Hyundai Card announced on June 17 that it has become the first domestic credit-specialized financial company (hereinafter referred to as “specialized credit finance company”) to issue a dual-currency Kimchi bond combining US dollars (USD) and Chinese yuan (CNY).
This Kimchi bond was publicly issued at a total scale of KRW 128.7 billion, consisting of USD 20 million and CNY 440 million. The dollar-denominated bond was issued as a single-tranche, one-year maturity bond, with the interest rate set at the Secured Overnight Financing Rate (SOFR), the risk-free rate, plus a spread of 77 basis points (1bp=0.01 percentage point). The yuan-denominated bond was also issued as a single-tranche, two-year maturity bond, with a coupon rate of 2.09%.
This Kimchi bond is a Korean-style green bond that complies with the Korean green taxonomy guidelines. The funds raised will be used to provide financial services related to eco-friendly mobility, such as electric vehicles (EVs) and fuel cell electric vehicles (FCEVs) of Hyundai Motor Group. Hyundai Card issued a KRW 240 billion green bond in 2019, becoming the first domestic card company to do so, and on June 11, it also issued a KRW 160 billion green bond, actively supporting Hyundai Motor Group’s carbon neutrality and carbon emission reduction policies.
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A Hyundai Card official stated, “Amidst the current challenging funding environment caused by increased volatility in domestic and international financial markets, the issuance of this dual-currency Kimchi bond is expected to help broaden our investor base and diversify funding risks by currency,” adding, “We plan to continue securing stable liquidity and strengthening funding competitiveness by utilizing various funding methods.”
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