Acuon Capital Issues First ESG Bonds
- Proceeds from USD 127 million bond to support industries focused on environmental and social sustainability
- Loan terms and expanded investor base reflect Acuon’s strong performance and healthy balance sheet
SEOUL March 9, 2021 Acuon Capital (“Acuon”), a South Korean consumer finance and leasing company owned by funds affiliated with Baring Private Equity Asia (“BPEA”), announced that it has issued its first-ever ESG bonds, worth KRW 140bn (US$ 127m). Acuon is the first Korean A0 rated capital company to issue an ESG bond in Korea, and the proceeds will be used to fund loans that have a positive ESG impact.
The bonds priced on average 18bps lower than other A0-rated capital companies, with longer dated maturities of between 3.25-3.5 years, and have attracted a wide range of quality investors. The proceeds will be used to invest in industries relating to environmental and social sustainability. Acuon will be required to measure and report on an ongoing basis as part of the ICMA (International Capital Market Association)’s Green Bond Principles of June 2018, Social Bond Principles of June 2020, and Sustainability Bond Guidelines of June 2018.
Commenting on the announcement, Han Chul Kim, Managing Director of BPEA said: “Since acquiring Acuon in 2019, we have worked closely with the management of the business to embed ESG in its strategy and operations, among other initiatives. This bond underpins the positive ESG impact Acuon continues to make and reflects BPEA’s commitment to helping businesses embrace ESG and digital innovation to create sustainable returns over the long term.”
“The bond offers a lower cost of funds than traditional issuances, which is a clear signal that investors believe the company’s rating could be higher. The strong uptake in this bond from high quality investors such as pension funds is testimony to Acuon’s excellent performance over the past 12 months, during which it has achieved significant growth in book value and new loan originations. The company’s risk management capabilities, continuing digitalization and diversification initiatives position it well for the future.”
In the 12 months ended December 2020 Acuon increased consolidated operating and net income by 21% and 11%, respectively, year on year.
The proceeds of the bond will be used to invest and lend to corporates, businesses, and projects in fields which include renewable energy and efficient technology, environmental pollution protection & management, environmentally-friendly transportation & infrastructure and sustainable water & natural resources.
Acuon has made significant progress in ESG adoption in recent years, establishing an ESG committee, setting up of ESG operating indices, developing Annual ESG Reports and linking to KPIs. The company recently received the Association Chairman Award from the Seoul Council on Social Welfare in recognition of its continuous contribution to the community.
The company is aiming to secure ISO14001: International standard of Environment Management System and ISO26000: International standard of Social Responsibility certifications by the end of the year.
About Acuon Capital
Acuon is one of the leading lending platforms in Korea with over $5 billion total loan portfolio. Acuon, formerly KT Capital, was founded in 2006, and subsequently acquired Doosan Capital and HK Savings Bank to build diversified lending capabilities including leasing and consumer finances. BPEA acquired Acuon in August 2019, and since then has worked with the company to develop its digitalization initiatives, risk management capabilities, and funding diversification strategies.
BPEA is one of the largest and most established private alternative investment firms in Asia, with over US$21 billion of assets under management. The firm manages a private equity investment program, sponsoring buyouts and providing growth capital to companies for expansion or acquisitions with a particular focus on the Asia Pacific region, as well as investing in companies globally that can benefit from further expansion into the Asia Pacific region. BPEA also manages dedicated funds focused on private real estate and private credit. The firm has a 23-year history and 190+ employees located across offices in Hong Kong, China, India, Japan, Singapore, Australia, and the US. BPEA currently has over 39 portfolio companies active in Asia with a total of 230,000 employees and sales of approximately US$32 billion.
For more information, please visit www.bpeasia.com
For further information please contact:
Baring Private Equity Asia
+852 5970 3618
Junseok Kim (Group Strategy Team)
+82 2 3467 4290