[Asia Economy Reporter Lim Jeong-su] Project financing (PF) refinancing for the Busan New Port Phase 2 Rear Road private investment project has been successfully completed with support from the Korea Credit Guarantee Fund.
According to the investment banking (IB) industry on the 25th, the Credit Guarantee Fund provided payment guarantees to the special purpose company (SPC) '(Yu) San-eop Giban Shinbo Busan Sinhang Je-i Baehu Doro' and issued asset-backed securities (ABS) worth 220 billion KRW. The funds raised through the issuance of ABS were used to acquire loans extended by the main lenders to '(Ju) Busan Sinhang Je-i Doro'.
Three financial companies, KB Securities, Heungkuk Life Insurance, and Heungkuk Fire & Marine Insurance, participated as the main lenders. The loan maturity is 23 years and 3 months, with the repayment date set for December 2043. Accordingly, Busan Sinhang Je-i Doro was able to refinance the PF borrowed for road construction.
Busan Sinhang Je-i Doro will use the procured funds for the construction of the Busan New Port Phase 2 Rear Road. The road spans a total length of 15.26 km, connecting Nammun-dong in Jinhae-gu, Changwon-si, Gyeongsangnam-do to Sanbon-ri in Jinrye-myeon, Gimhae-si.
This project is being carried out under a Build-Transfer-Operate (BTO) agreement with the Ministry of Land, Infrastructure and Transport. Upon completion of the road construction, ownership will be transferred to the government, which will manage and operate it for 30 years.
The Credit Guarantee Fund’s infrastructure guarantee supply target for this year is approximately 2 trillion KRW, with plans to supply about 1.2 trillion KRW in infrastructure guarantees in the second half of the year.
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