Hanwha Solutions Corporation, South Korea’s leading solar power, chemical and advanced materials company focusing on providing sustainable energy and materials solutions, accessed the green dim sum bond market with a guarantee provided by the Credit Guarantee and Investment Facility (CGIF), a trust fund established by the Asian Development (ADB).
The three-year CNH1 billion (US$153.85 million) offering, issued on April 19, is the first dim sum bond supported by CGIF and is also the first green bond guaranteed by CGIF. The 100% credit-wrapped bond, rated AA by S&P Global Ratings, was competitively priced with a coupon of 3%. This was 25bp tighter than the initial price guidance of 3.25%, driven by the strong demand from institutional investors from Asia and Europe.
Hanwha Solutions will use the bond proceeds for eligible green projects under its green financing framework, with Sustainalytics providing the second party opinion. Standard Chartered acted as the sole bookrunner, lead arranger and green structuring adviser for the transaction.
Commenting on the deal, CGIF chief executive officer Guiying Sun says Hanwha Solutions will certainly benefit from the green dim sum issuance in diversifying its funding sources, reducing financing cost and improving performance. “CGIF will continue to support thematic bonds, such as green bond and social bond, issued by Asean+3 companies for the sustainable economic growth and social development of the region,” she adds.
Hanwha Solutions chief financial officer Yong-In Shin says that with the successful issuance, the company will continue to expand eco-friendly business in accordance with circulating cash flow pursuant to the utilization of supplementary green financing in the future.
Adds Rahul Sheth, head for sustainable bonds at Standard Chartered: “The success of this transaction highlights investors’ validation of the issuer’s ESG strategy encompassing its strong push into renewables and other innovative, environmentally-friendly solutions.”
Hanwha Solutions is a newly-formed corporation following the merger of Hanwha Chemical, Hanwha Q CELLS and Hanwha Advanced Materials in January 2020. Hanwha Solutions operates in three business areas: chemicals, total energy solutions and advanced materials.
The green dim sum bond is the third local currency bond deal guaranteed by CGIF this year. The first deal it guaranteed was the dual-tranche offering issued on January 8 by PT Ketrosden Triasmitra of Indonesia, a leading submarine and inland network infrastructure provider. The three-year and five-year issuances totalling 583 billion rupiah (US$40.10 million) represented CGIF’s first rupiah public bond offering listed on the Indonesia Stock Exchange.
The second deal was for JWD InfoLogistics, a Thai integrated logistics service provider, amounting to 700 million baht (US$22.78 million) for five years. Issued on March 5, the transaction was the first medium-term note programme to be supported by CGIF. The deal achieved CGIF’s most competitive pricing for a Thai baht bond of 2.10%.
CGIF was established to develop and strengthen local currency and regional bond markets in the Asean+3 region. It commenced its guarantee operations on May 1 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3- domiciled bond issuers.