Korea Land and Housing Corporation issues 15-year euro bond worth about 74.5 billion won
In short
Korea Land and Housing Corporation (LH) said on 22 October that it issued a 15-year euro-denominated bond of 50 million euros, about 74.5 billion won. After a currency swap the final won interest rate is 4.297%, which LH said is 0.10 percentage points below domestic won bonds. The proceeds are to go to public housing construction and other policy projects.
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Korea Land and Housing Corporation (LH) said on 22 October that it has issued a euro-denominated bond of 50 million euros, about 74.5 billion won. The bond has a 15-year maturity, and the issuance was confirmed on 21 October. [ 1 , 2 , 3 , 4 ]
After a currency swap, the final won interest rate is 4.297%, which is 0.10 percentage points lower than domestic won-denominated bonds. Asia Economy and Newsis said LH cut its interest costs as a result. [ 1 , 2 , 3 , 4 ]
LH described the issue as a 15-year maturity that is rare among domestic institutions in the global bond market. It said the significance lies in securing medium- and long-term funds to carry out policy projects steadily and in diversifying the maturities of its debt. Asia Economy added that euro private placement bonds are usually issued with maturities of 3 to 5 years. [ 1 , 2 ]
The issue followed last November's public bond of 500 million euros, then valued at about 849.3 billion won, and came at the request of high-quality local investors in Europe. Yonhap said LH explained that demand in the international bond market was strong, based on its credit ratings of Aa2 from Moody's, AA from S&P and AA- from Fitch. [ 1 , 2 , 4 ]
LH has previously issued bonds in Australian dollars, Japanese yen and Canadian dollars, and plans to issue a US dollar public bond within October. Newsis and Chosun Ilbo said LH intends to diversify the currencies it raises funds in and extend maturities to broaden its base of global investors. [ 1 , 2 , 3 , 4 ]
An LH official said the proceeds will be used for public housing construction and other key policy projects to expand housing supply. Asia Economy and Newsis quoted the official as saying LH will keep actively diversifying overseas funding sources to build a stable base for its policy projects. [ 1 , 2 , 3 , 4 ]
Why it matters
LH said the issue secures medium- and long-term funds and diversifies the maturities of its debt. The documents give no market reaction or wider assessment beyond LH's own explanations.
Key facts
- LH issued a euro-denominated bond of 50 million euros, about 74.5 billion won, with a 15-year maturity. [ 1 , 2 , 3 , 4 ]
- The issuance was confirmed on 21 October and announced on 22 October. [ 1 , 2 , 3 , 4 ]
- The final won interest rate after the currency swap is 4.297%, 0.10 percentage points below domestic won bonds. [ 1 , 2 , 3 , 4 ]
- The issue followed a request from high-quality local investors in Europe, after a 500 million euro public bond last November. [ 1 , 2 , 4 ]
- LH plans to issue a US dollar public bond within October. [ 1 , 2 , 3 , 4 ]
- LH said the proceeds will go to public housing construction and other key policy projects to expand housing supply. [ 1 , 2 , 3 , 4 ]
Confirmed by several sources
- LH said it issued a 15-year euro-denominated bond of 50 million euros (about 74.5 billion won), confirmed on 21 October. [ 1 , 2 , 3 , 4 ]
- The final won rate after the currency swap is 4.297%, 0.10 percentage points lower than domestic won bonds. [ 1 , 2 , 3 , 4 ]
- LH plans to issue a US dollar public bond within October. [ 1 , 2 , 3 , 4 ]
- The issue came at the request of high-quality local European investors, following last November's 500 million euro public bond. [ 1 , 2 , 4 ]
Still unclear
- Whether this 50 million euro bond was a public offering or a private placement. The documents do not say; Asia Economy only notes that euro private placement bonds are usually issued with 3 to 5 year maturities.
- The exact date in October of the planned US dollar public bond and its size. The documents say only that LH plans to issue it this month.
- Who bought the bond and how the issue was priced in euros. The documents refer only to high-quality European investors and give no euro yield.