Finance, Industrial  -  January 12, 2023

SK hynix Issues Sustainability-Linked Bond

SK hynix Inc., a semiconductor supplier,  announced that it successfully issued a Sustainability-Linked Bond (SLB) with a total amount of USD 1 billion.

"The company is highly encouraged by the large-scale investment even during the downturn in the semiconductor industry," SK hynix said in a statement. "We see this as a result of global investors' trust in the company's commitment to climate action, along with the prospects of a turnaround in the semiconductor industry later this year."

Orders from more than 304 global institutions surpassed the company's expectations and thus, resulted in a decision to increase the total amount of the issuance from USD 500 million to USD 1 billion.

SLB is a type of bond for which the interest rates can vary depending on whether the issuer achieves predefined environmental, social, and governance (ESG) management objectives. SK hynix aims to reduce Scope 1 and 2 GHG emissions intensity by 57% compared to the company's 2020 baseline by 2026.

The company plans to disclose the performance against target for GHG emissions reduction transparently in its Sustainability Reporting System (SRS) every year. The company, subsequently after 2026, will also measure the final target achievement during the first half of the following year and adjust interest rates according to the results.

SK hynix also issued a green bond with an amount of USD 750 million along with SLB. A green bond is a type of bond with a special purpose, limited to use only to fund environmentally friendly projects. The company plans to invest in eco-friendly projects including water quality management, energy efficiency improvement, pollution prevention and ecological restoration.