Bond spotlight

LG Energy Solution – new issues come at a concession

Written by Rose Choy

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LG Energy Solution (LGENSO), a leading electric vehicle (EV) battery manufacturer, has issued a $2bn multi-tranche USD bond, including a 10yr green bond.

In this analysis, we unpack the spread dynamics between LGENSO’s green and traditional bonds — what’s known as the “greenium” — and benchmark these against Korean and US automakers. Greenium can change over time, and there is no obvious pattern. While periods of underperformance in green bonds may represent a shift in demand and supply, they also offer investors an opportunity to align their portfolios with sustainability goals without sacrificing returns.

This pricing discrepancy sets the stage for a deeper look at shifting investor sentiment and the mechanics of green bond valuation. Periods of underperformance in green bonds offer investors an opportunity to align their portfolios with sustainability goals without sacrificing returns.

About the author

Rose Choy

Rose Choy

Research Director, APAC

Based in Singapore, Rose has over 20 years’ experience in capital markets, most recently as a Senior PM at Conning Asia, and her research focuses on credit research and analysis on the energy transition in the Asia-Pacific region.

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