Major South Korean shipyard Hyundai Heavy Industries Co. said Tuesday it has successfully sold green bonds worth US$300 million to overseas investors.

The five-year green bonds carry an interest rate equaling to the yield on five-year US Treasuries plus a spread of 0.95 percentage point, 0.20 percentage point lower than its original offer.

The shipbuilder's first overseas public sale of five-year green bonds, guaranteed by the state-run Korean Development Bank (KDB), has been two times oversubscribed, with 42 Asian, European and Middle Eastern institutions subscribing, the shipyard said.

Green bonds are meant to raise money to support environmental projects and other eco-friendly infrastructure investments.

"Our ESG management activity has drawn positive responses from overseas investors, despite worsening investor sentiment stemming from unstable international geopolitical conditions and a US rate hike," the company said.

Hyundai Heavy Industries said the proceeds from the green-bond sale will be used to finance construction of eco-friendly vessels and establish a system of sustainable growth based on environment, social and governance (ESG) management.

The company has been ramping up its efforts to pursue ESG management. In June 2020, Hyundai Heavy Industries signed a 480 billion-won ($393 million) green loan contract, or a type of loan instrument for eco-friendly projects. It floated 300 billion won in won-denominated green bonds in March this year.

Hyundai Heavy Industries is the flagship of Korea Shipbuilding & Offshore Engineering Co. (KSOE), a shipbuilding subholding company under Hyundai Heavy Industries Holdings Co. that will change its name to HD Hyundai next week. KSOE also has Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co. under its wing. (Yonhap)