Shinhan Bank has become the first issuer of transition bonds in Japan’s Samurai bond market, raising 40 billion yen ($260 million) to finance projects that promote carbon reduction and energy efficiency among high-emission industries.
The South Korean commercial lender said on Monday that it sold yen-denominated bonds in three tranches, including two-year notes at 1.322%, three-year and three-month notes at 1.556% and a five-year note at 1.732%.
Nomura Securities, Daiwa Securities and Mizuho Securities arranged the bond sale.
Strong investor demand, particularly from overseas institutional investors, prompted Shinhan to increase the deal size by 10 billion yen from its initial offerings, the Korean commercial bank said.
Transition bonds are a newer form of debt designed to help high-greenhouse gas-emitting industries raise capital to fund their shift toward lower-carbon operations.
Unlike green bonds, which finance projects in already eco-friendly sectors such as renewable energy, transition bonds target companies still in the process of becoming greener.
Shinhan will also use the proceeds for the green transition of carbon-intensive companies and to improve energy efficiency.
The bank has issued ESG-themed, or green, bonds for 13 years in a row since late 2020, reinforcing its position as a leader in sustainable finance among Korean lenders.
“This successful debut of a transition bond in Japan comes at a time when investor interest in ESG finance is growing, making it especially significant,” a Shinhan Bank official said.
A Samurai bond is a yen-denominated debt instrument issued in Japan by a foreign company under Japanese market regulations.
