[Sponsored Report] Hyundai Capital leads in foreign procurement

The global foreign procurement market is worth $9.5 trillion, occupying around 12 percent of the world’s gross domestic product.

Hyundai Capital, a financial subsidiary of Hyundai Motor Group, has been making remarkable progress by issuing foreign bonds worth 1 trillion won ($838.5 million) a year.

In January, Hyundai Capital succeeded in issuing green bonds at a cost of 250 million Swiss francs ($247.4 million) in Switzerland for the first time as a Korean paper, which was 10 basis points (0.1 percent) cheaper than the U.S. funding rate.

In 2005, Hyundai Capital succeeded in issuing corporate bonds in the Japanese bond market (samurai bond) with its own credit rating for the first time as a specialized credit finance corporation. In the same year, it succeeded in issuing dollar bonds for the first time as a nonmonetary institution.

In 2008, the corporation entered the Malaysian bond market successfully and consolidated its position as a regular bond issuer. It later made a successful entry into major bond markets such as Switzerland, Hong Kong and Australia. In 2014, Hyundai Capital United Kingdom (HCUK) succeeded in issuing asset-backed securities (ABS) in Europe. In 2017, Hyundai Capital China succeeded in issuing corporate bonds in China and increased the number of financing cases for direct bond issuing, creating synergy between the headquarters and foreign branches.

Experts have emphasized the importance of the foreign procurement market. It is important to effectively distribute the risks of the instable domestic procurement market, which is easily affected by internal and external variables, and secure the stability of procurement. In addition, entrance into foreign procurement markets can create a positive impact on the corporation’s reputation and domestic procurement. The key competitive edge that Hyundai Capital has in the foreign procurement market is fast decision-making and execution ability.

Hyundai Capital has been constantly monitoring major capital market trends, investor behavior and issuance performance trends around the world. It quickly chooses the best timing, markets and products and takes action right away.

In addition, since 2005, the corporation has organized a stable investor network by conducting over 50 investor relations events twice or three times a year. It is also one of the most active organizations in Korea for offshore procurement activities.

Hyundai Capital’s policy prioritizes financial stability and contributes to raising shareholder confidence. It has been establishing and executing systematic financial policy by managing leverage at a conservative level compared to the domestic supervision regulation and by monitoring interest rates and liquidity risk through its asset liability maturity ratio (ALM).

Based on this competitiveness, Hyundai Capital has been recognized in the foreign procurement market. It was awarded the 2016 Best Green Bond Korea from The Asset, a global financial magazine, and the 2018 Best Corporate Bond for issuing Swiss franc bonds.

By Shim Ji-yong [shim.jiyong@joongang.co.kr]