President Lee Dong-chul of KB Kookmin Card. (Photos: KB Kookmin Card)

KB Kookmin Card issued $300 million in foreign currency-denominated sustainability bonds in early May. The bonds are five-year fixed-rate U.S. dollar-denominated bonds. Its coupon rate is 1.50 percent per year.

Earlier in May, at the “Net Road Show” to predict demand from Asian and European markets, 60 investors pledged to buy the bonds for $1.1 billion.

Therefore, KB Kookmin Card was able to issue the bonds at an interest rate 37.5bp lower than the IPG.

KB Kookmin Card cited not only its credibility and stability as a subsidiary of KB Financial Group, Korea’s leading financial group, but its continued growth and high asset soundness as the main reasons for the successful demand forecast.

Moody’s, an international credit rating agency, gave the newly issued foreign currency-denominated senior unsecured bonds an A2 rating.

The newly issued bonds are sustainable bonds aimed at promoting projects that have a positive impact on the environment and society.

Funds raised through the issuance of the bonds will be used for giving financial support to low-income and marginalized groups and various social value creation projects.

In order to eliminate the risk of exchange rate fluctuation due to the issuance of U.S. dollar-denominated bonds, KB Kookmin Card increased stability and minimized volatility in raising funds through overseas markets by signing a cross-currency interest rate swap (CRS) agreement that exchanges principal and interest payments between different currencies.

KB Kookmin Card also received a preliminary certificate about the bonds from Sustainalytics, a global sustainability evaluation agency, on its overall sustainability management system, including compliance with sustainable bond guidelines such as the Sustainability Bond Guidelines (SBG) and the Social Bond Principles (SBP).

“We expect the issuance of the foreign currency-denominated bonds to have a positive impact on long-term stable financing by diversifying its means and channels away from current Korean won-denominated credit card bonds and asset-backed securities (ABS)-oriented financing methods,” a KB Kookmin Card official said.

In the meantime, KB Kookmin Card will spearhead a low-carbon life campaign dubbed “School Challenge” for elementary and middle schools across the country to become a leading card company in tackling climate change.

The campaign will run for two months until June through the mobile application “Climate Behavior 1.5℃.” The Ministry of Environment made the application to inform people of the importance of carbon neutrality and encourage them to practice low-carbon lifestyles.

Students of elementary and middle schools and their parents across the country who participate in the campaign will be able to earn points for creating plastic recycling props and eco-friendly quizzes proposed by KB Kookmin Card through the app.

After the campaign, the Ministry of Environment and the Ministry of Education will select excellent schools that actively implemented climate action by generally scoring points accumulated by participating schools and their campaign participation rates.

KB Kookmin Card will support the creation of school forests with 1,200 trees at four schools, which will reduce fine dust emissions.

The 1,200 trees used to create school forests absorb about 530 kilograms of carbon dioxide and emit about six tons of oxygen annually.

This environmental effect is the same as the effect from operating air purifiers for 132,700 hours to slash fine dust emissions.

“We hope that this campaign will lead students to pay more attention to climate crises such as global warming and active participation in climate response, while helping them study in a pleasant classroom environment and achieve emotional stability through continuous communications with trees,” a KB Kookmin Card official said.

“KB Kookmin Card will steadily carry out various eco-friendly activities in the future, so it will become a leading credit card company in coping with climate change along with environmental protection.”

A view of the head office building of KB Kookmin Card located in Gwanghwamun, downtown Seoul.