Korea Hydro & Nuclear Power Co. (KHNP) announced on May 29 that it has successfully completed demand forecasting to issue won-denominated “social bonds.”
The company planned to raise 150 billion won (US$125.58 million) by issuing 5-year, 20-year and 30-year bonds. But subscriptions totaled 560 billion won (US$468.82 million), almost four times the targeted amount. Accordingly, KHNP is planning to increase the issuance to 300 billion won (US$251.15 million).
Pension funds and insurance companies showed a strong interest in the KHNP bonds as the bonds are social bonds and the company used a transparent demand forecasting system.
Social bond is a bond issued to resolve social problems, such as providing support to small and mid-sized firms and the disadvantaged and creating jobs.
Considering the fact that the bonds to be issued will be used for the public interests, KHNP carried out the demand forecasting in the manner of forming a fair price, instead of the existing bidding procedure after registration. It has become the first environment, social, governance (ESG) bond issuer to determines prices through demand forecasting.