LG Energy Solution Ltd. (LGES) announced on Tuesday that it has successfully raised US$1 billion by selling global green bonds. The funds will be used to support the battery maker’s ambitious plans for market growth.
The bonds were divided into two tranches – $400 million in three-year debts and $600 million with a five-year maturity. The coupon for the three-year bonds was set at 100 basis points above the three-year US Treasurys, while the coupon for the five-year bonds was set at 130 basis points above the five-year US government bonds.
Green bonds are debts that are issued with the intention of using the proceeds for environmentally-friendly investments. LGES intends to use the funds to invest in its battery manufacturing sites around the world.
The battery supplier to General Motors Co., Tesla Inc. and Hyundai Motor Co. is currently constructing new battery manufacturing facilities in the United States to further its foreign expansion. This year, LGES will increase its capital spending by more than 50 percent compared to last year’s 6.3 trillion won ($4.76 billion). At the end of June, the company’s order backlog stood at 440 trillion won.
The bond sale was highly successful, with the bids received amounting to five times the offered amount. The sale attracted some 300 investors.
elly@yna.co.kr
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