LG Chem issues $300 million in green bonds to fund expansion
The funds would go into the development and production of EV battery cathode materials and separation membranes
South Korea’s LG Chem said it had issued new bonds worth US$300 million to help improve the competitiveness of its electric vehicle (EV) battery materials business and fund new investments in green businesses.
The bond issued in U.S. dollar has maturity of three years. The yield is fixed at 4.436 percent, which is 1.4 percentage points added to the three-year U.S. Treasury yield. The final spread was lowered by 0.25 percentage point from the initially proposed one.
LG Chem, the parent company of, and a key materials supplier to, the second largest EV battery manufacturer LG Energy Solution, said its US dollar denominated bonds have a fixed interest rate of 4.4%. The funds would go into the development and production of EV battery cathode materials and separation membranes.
LG Chem last April pledged to invest around KRW4trn (US$3.1bn) in new plants and equipment to strengthen its position in the global EV battery supply chain. The company said it had secured KRW3.5 trn (US$US2.7bn) in funds this year, including KRW2.5trn is raised from LG Energy Solution’s initial public offering (IPO) in January.
Earlier this year, the company started construction of a new factory in South Korea to produce high nickel cathode materials for EV batteries, while also announcing a new cathode materials joint venture in China. Last month it agreed to establish a new joint venture with Kemco, a subsidiary of Korea Zinc Company Ltd, to recycle EV battery precursor materials.