Issuance marks a diversification of the corporation's debt maturity profile

The headquarters of Korea Land and Housing Corporation in Jinju, South Gyeongsang Province. [LH website]
The headquarters of Korea Land and Housing Corporation in Jinju, South Gyeongsang Province. [LH website]

Korea Land and Housing Corporation announced Thursday that it had issued a euro-denominated bond worth 50 million euros ($56.2 million).

The bond was priced Wednesday with a 15-year maturity — a rare tenor for a domestic institution in global bond markets. The corporation said the issuance secures long-term funding to support its policy projects and diversifies its debt maturity profile.

Euro-denominated private placement bonds typically carry maturities of three to five years, making LH's 15-year issuance the first of its kind by a domestic institution this year.

After a currency swap, the effective won-denominated interest rate came to 4.297 percent — 0.10 percentage points lower than comparable domestic won-denominated bonds — allowing LH to reduce its interest costs.

The issuance follows LH's euro-denominated public bond offering of 500 million euros last November, valued at approximately 849.3 billion won at the time, and was arranged at the request of high-quality European investors. LH said the strong demand reflects its credit standing and policy role in global capital markets. The corporation holds credit ratings of Aa2 from Moody's, AA from S&P and AA- from Fitch.

LH also issued an Australian dollar bond worth 537.5 billion won in May, and has previously tapped the Japanese yen and Canadian dollar markets. The corporation plans to issue a US dollar public bond later this month. LH said it will continue to diversify its funding currencies and extend its maturity structure to broaden its global investor base.

"The proceeds from this bond issuance will be used for LH's key policy projects, including public housing construction, to expand housing supply," an LH official said. "We will continue to actively diversify our overseas funding sources to build a stable foundation for carrying out our policy projects."


hss@heraldcorp.com