Korean commercial bank Kookmin's €500 million ($563.6 million) issue was its ninth social or sustainability bond in just over two years, thereby demonstrating the group's commitments to support environmental and social causes, and its first euro denominated covered bond.
The proceeds of the bond will be used for a combination of green and social project categories as laid out in Kookmin's Sustainability Finance Framework, and in particular to mitigate the adverse effects of the Covid-19 pandemic. The framework was reviewed by Sustainalytics who confirmed it is aligned with the four core components of the Green Bond Principles (GBP), Social Bond Principles (SBP) and Sustainability Bond Guidelines (SBG).
The transaction gathered an order book of more than €2.2 billion which enabled Kookmin to price lower than its initial guidance. Kookmin stated that the covered bond format enabled it to further diversify its investor base and achieve significant savings, compared with other debt formats.
Kookmin's previous issues had been in US dollars and Korean won.
Issuer: Kookmin Bank
Size: €500 million ($565 million)
Maturity: 15 July 2025, 5 years
Use of Proceeds: Renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of natural resources and land use, biodiversity conservation, clean transportation, sustainable water and wastewater management, climate change adaption, green buildings, affordable basic infrastructure, affordable housing, access to essential services, employment generation, microfinance, and socioeconomic advancement and empowerment
External Review: Sustainalytics
Lead managers: BNP Paribas, Citigroup, Crédit Agricole CIB, HSBC, J.P. Morgan and Société Générale with KB Securities as co-manager
Credit rating: AAA (S&P and Fitch)
Other highlights/notable features: First euro denominated covered bond from a Korean commercial bank