- The bond successfully draws high interests from investors, attracting orders five times the issuance size
- The company to further accelerate the investment in production facilities, aimed at securing global market leadership
- LG Energy Solution’s Green Finance Framework receives the highest rating of SQS1 (excellent) by Moody’s
SEOUL, September 19, 2023 – LG Energy Solution (KRX: 373220) today announced it has successfully issued its first global green bond. The USD 1 billion bond includes a three-year bond of USD 400 million and a five-year bond of USD 600 million.
The three-year and five-year bonds were issued with a yield of +100 basis points (bps) and +130 bps from the U.S. 3-year and 5-year government bond rates, respectively. Accordingly, the two bonds’ final issuance rates were reduced by 40 bps respectively from the initial price guidance[1].
LG Energy Solution’s Green Finance Framework (GFF), which details the company’s plan for green bond utilization and management, earned the Moody’s highest rating of SQS1 (excellent), thereby reaffirming the company’s systematic ESG management and corporate initiatives for decarbonization.
Earlier, Moody’s and S&P assigned LG Energy Solution a bond credit rating of Baa1 / BBB+ based on its solid positioning in the global secondary battery market and stable business foundation.
Echoing high expectations for the company’s growth potentials, including its active investment plans and the introduction of the Inflation Reduction Act (IRA), LG Energy Solution’s first-ever global green bond issuance attracted orders from 114 institutional investors on its three-year bond and 186 on its five-year bond, with the total order reaching five times the issuance size.
Capitalizing on the bond issuance, LG Energy Solution plans to accelerate its investment in global production network. At this year’s first-quarter earnings call, the company announced it had invested KRW 6.3 trillion in capex for global battery production last year and plans to further increase the investment this year by more than 50 percent from 2022.
LG Energy Solution aims to lead on with assertive investments in expanding product portfolio, in not only EV batteries but also energy storage systems (ESS) and others. The company has announced a KRW 3 trillion investment in its new 16GWh ESS battery plant in Arizona, and with continued investments, plans to triple the revenue from its ESS sector in the next five years.
Overall, the company’s total order backlog has recorded KRW 440 trillion as of June 2023.
[1] The expected issuance spread, as announced by the issuer upon the commencement of investor order placement