Shinhan Bank sold ¥40 billion ($260 million) in transition bonds last week, marking the first such issuance by a foreign institution in Japan’s Samurai market. The South Korean commercial lender structured the offering across three fixed-rate tranches and one floating-rate note, with yields ranging from 1.322% for two-year paper to 1.732% for five-year securities.
Strong demand from institutional investors, particularly those based overseas, prompted the bank to expand the deal size by ¥10 billion from its original plan. The pricing came just days after the International Capital Market Association released climate transition bond guidelines at its Tokyo conference, establishing clearer standards for debt instruments targeting carbon-intensive industries.
Transition bonds occupy a distinct niche between traditional green bonds and sustainability-linked debt. While green bonds finance projects already meeting environmental standards, transition instruments support companies working to reduce emissions—often in sectors like steel, cement, and chemicals that wouldn’t qualify for conventional sustainable finance.
Japan has emerged as the dominant market for transition bonds in 2025, with sovereign and corporate issuers accounting for nearly all global volume. The November 7 pricing session, which included offerings from Renault and Slovenia alongside Shinhan’s deal, represented the busiest day for Samurai bonds in more than a decade, raising over ¥160 billion.
Nomura Securities, Daiwa Securities, and Mizuho Securities arranged Shinhan’s sale.
