Green Bonds + Social Bonds
Lotte Corporation announced on August 1 that it has issued US$200 million (22.4 billion won) worth of sustainability bonds in the global capital market with the goal of implementing Lotte World Tower’s social responsibility.
According to the company, the newly issued suitability bonds have the maturity of three years and the interest rate of issuance is 92.5 basis points higher than the three-month U.S. dollar Libor interest rate. It is 27.5 basis points lower than the initial interest rate offered. The bonds drew an overwhelming subscription of US$2.26 billion (2.53 trillion won) from 119 institutional investors across the world at the Book building on July 31. The figure was 11 times higher than the scheduled amount.
Lotte’s sustainability bonds are generally a mix of green bonds and social bonds. Green bonds are based on the establishment of environmentally friendly facilities and the production of eco-friendly energy, while social bonds are designed to create social jobs and conduct social projects. A company has to meet the requirements of issuance principles set by the International Capital Market Association (ICMA) in a bid to issue sustainability bonds.
Lotte World Tower considered environmentally friendly development and operation from the design phase. Accordingly, it has become the world’s first skyscraper that received a Gold rating in the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) system right after the completion. It also won the Grand Award from the National Engineering Excellence Awards.
Lotte World Tower generated 15 percent of its energy consumptions itself last year alone through efficient management of eco-friendly energy, such as heating and cooling system using water heat and geothermal heat and solar collector. In addition, the tower directly and indirectly created 33,000 jobs, including social jobs.