Dunchon Jugong Takes a Breather... HUG Approval for 750 Billion KRW Guarantee Loan

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] The Dunchon Jugong Reconstruction (Olympic Park Foreon) project association in Gangdong-gu, Seoul, has successfully secured 750 billion KRW in project funding.

On the 12th, according to the Dunchon Jugong association and HUG, the association will raise 750 billion KRW in project funds through loans guaranteed by the Housing and Urban Guarantee Corporation (HUG) from five domestic commercial banks (Shinhan, KB Kookmin, Woori, Hana Bank, and NH Nonghyup Bank).

The interest rate is expected to be around 7.6-7.7%, including the CD rate (3.97%), a fixed interest rate of 2.5%, and bank and HUG guarantee fees. The maturity date is set for April 2025, which is three months after the completion date in January 2025.

With Dunchon Jugong successfully securing 750 billion KRW in funding, the 723.1 billion KRW project financing (PF) loan, which was due on the 19th, can now be repaid on time regardless of the general sales contract rate.

Initially, the association was expected to repay the project funds using the general sales deposits collected by the 17th, but due to the burden that the initial contract rate needed to be at least 77% for a lump-sum repayment, they pursued funding through HUG guarantees.

Dunchon Jugong began contracts on the 3rd, and industry insiders expect the contract rate, including confirmed winners and standby winners, to reach 70-80% due to recent government deregulation effects.