(Bloomberg) -- LG Electronics Inc. is selling bonds denominated in US dollars to partly help the South Korean appliance maker fund sustainable initiatives, its first such offering.

The company is offering an $800 million, two-part investment-grade debt deal that includes a labeled bond, according to a person with knowledge of the matter. The longest portion of the offering, a $300 million five-year sustainability security, is set to yield 1.1 percentage point above Treasuries after initial discussions of around 1.5 percentage point, said the person, who asked not to be identified as the details are private.

LG Electronics plans to use proceeds from the sustainability tranche to fund eligible green and social projects such as installing energy efficient electronic equipment, green buildings and providing essential services to socially vulnerable groups like youth with disabilities, according to its sustainable finance framework published in January.

Banks started marketing the deal to fixed income investors last week. If it prices, it will be the company’s first ESG-labeled bond in global markets, according to data compiled by Bloomberg. LG Electronics has in the past tapped local markets to fund green initiatives.

Moody’s Ratings assigned a Baa2 grade to the proposed senior unsecured notes, it’s second lowest high-grade mark, earlier this month. LG Electronics’ solid credit profile, diversified product portfolio and its “sound leverage” offset its “moderate profitability stemming from intense competition and currently sluggish consumer demand,” analyst Sean Hwang wrote in a note.

Companies across the globe are rushing to sell all kinds of bonds in the US investment-grade market amid strong investor demand and relatively tight spreads. Issuance this year through Wednesday stands at a record $598.6 billion, according to data compiled by Bloomberg. The debt deluge is helping fuel a global boom in green bonds.

Read more: Green-Bond Issuance Reaches $188 Billion in Blockbuster Quarter

Established in 1958 and the largest shareholder of LG Corp., LG Electronics is looking to expand into EV charging and digital health among other business areas, according to its framework. The Seoul, South Korea-based firm produces household appliances, electronics and automotive components and employed over 33,000 people as of June 30.

A group of banks including BNP Paribas SA, Citigroup Inc., HSBC Holdings Plc and JPMorgan Chase & Co. are managing the bond sale, the person said.

--With assistance from Ameya Karve, Kyungji Cho and Jiayu Liu.

(Updates to add pricing information.)

©2024 Bloomberg L.P.