Title : An Evaluation and Proposed Strategies for PT XYZ Tbk’s Green Bond

Vol 7 No 1 (2024): Volume 07 Issue 01 January 2024

Article Date Published : 17 January 2024 | Page No.: 382-394 | Google Scholar | Crossref doi for this article

Abstract :

Environmentally friendly projects could be funded by green bond. The most recent company that issued green bond is PT XYZ Tbk. The company has 112.2 MW gap to their hydro power plant capacity target. Moreover, the green bonds issued has higher coupon than other green bonds in Indonesia. This research aims to find the issue’s cause, the effect of green bonds issuance on company valuation, and recommendations for next green bonds issuance. Compared with benchmarks in Indonesia and some issuers abroad, PT XYZ Tbk’s has no Environmental, Social, and Governance (ESG) rating and the green bond has lower credit rating than other issuers. The value of PT XYZ Tbk increases by 2.35% after issuing green bond, calculated using Discounted Cash Flow valuation technique. For successful future green bond issuance, PT XYZ should increase its credit rating, mitigate risk related to hydro power plant condition, and get ESG rating.

Keywords :

Company Valuation, cost of capital, Credit Rating, ESG Rating, Green Bond.

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How to Cite :

An Evaluation and Proposed Strategies for PT XYZ Tbk’s Green Bond. David Djaja, Erman Sumirat, Deddy Priatmodjo Koesrindartoto , 7(1), 382-394. Retrieved from https://ijcsrr.org/single-view/?id=14498&pid=14318

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