Hyundai Card issues $500m uni-tranche Reg S bond

The financial arm of Hyundai Motor Group is also planning for regular bond issuances in several local currencies, including Japanese yen.

Hyundai Card, Seoul-headquartered credit card firm under Hyundai Motor Group, announced the issuance of a $500 million, US dollar-denominated Reg S bond in Asian and European markets. This marks the first time in 17 years that the firm has issued a US dollar bond.

The five-year uni-tranche note was priced at 135 basis points above the five-year US Treasury and 35 basis points lower than the initial price guidance, according to an April 19 press release from the firm.

Proceeds will be channelled towards general corporate purposes, a Hyundai Card spokesperson told FinanceAsia. The contact also said that the Reg S issuance comes naturally as part of the firm’s diversifying funding with the development of its business. BNP Paribas, Citi, Crédit Agricole and JP Morgan acted as joint bookrunners for the deal.

Hyundai Card participated in the export of an innovative credit cards issuing system, named H-ALIS, to Japan in September 2022, which enables simpler credit cards issuance by setting parameters ad default templates that does not require programming work. Last year, the firm introduced Apple Pay to the South Korean market.

“Hyundai Card has witnessed the steady growth of its business and increase in card holders,” the spokesperson said.

The person told FA that 76% of the investors in the bond deal was based in Asia Pacific, with the other 24% investors from Europe, the Middle East and Americas (EMEA). When breaking down by investor types, asset and fund managers account for 66% of the book, 12% were banks, 10% pension funds, 6% by central banks and official institutions. Another 6% was purchased by private banks, securities houses and brokers.

Fitch Ratings upgraded the long-term issuer default rating (IDR) of Hyundai Card to BBB+ from BBB in early March, citing the stronger capability to support of its parent company, Hyundai Motor Company. Both have obtained an A+ rating from Japan Credit Ratings Agency (JCR), being able to issue bonds targeting local investors in the Japanese market.

The firm positions itself as a ‘regular issuer’, looking to review fundraising in various currencies, the spokesperson said. Last June, it issued a green bond denominated in Korea won worth $193 million, a triple-tranche issuance maturing in three-, four- and five-years’ time. In 2021, it issued a $600 million green bond in the US bond market, and in September 2020, the firm was the first to issue green dim sum bonds denominated in offshore Renminbi at CNH600 million ($82.8 million).

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