Chinese steel giant Baoshan Iron and Steel has recently introduced the first ‘low-carbon transition green corporate bond’. This was highlighted in its Annual Report, 2022 to the Shanghai Stock Exchange.
The primary focus behind this is accelerating carbon neutralization and to expedite quality development of the industry. Furthermore, new reforms were introduced to upgrade China’s steel industry with the focus on low-carbon emissions.
The bond will cover a period of 3 years and RMB 500 million is estimated to be raised by the issuance. The issue rate is fixed at 2.68%. These bonds will be led by CITIC Securities and underwritten by Guotai Junan Securities, Shenwan Hongyuan Securities, CICC, and Hwabao Securities.
The bond will fund Zhanjiang Iron & Steel’s hydrogen-based shaft furnace system project, which is a subsidiary of Baosteel Co Ltd. The project aims to replace the conventional blast furnace metallurgical process with hydrogen-based shaft furnace low-carbon metallurgy. The bonds will play a key role in achieving the objective of “carbon peaking in 2030 and carbon neutrality in 2060” and green industrial development. Furthermore, it is a key step to establishing a the low-carbon metals and mining production base and an innovative technology exchange platform.
The steel major has expanded the scale and proportion of direct financing in recent times, thereby creating a good image in the bond market. Funds raised have ensured the company’s transformation to an ultra-low emission standard, its daily operating capital needs, and optimized its debt financing structure.
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