KB Financial Provides 500 Billion KRW Liquidity Support to Real Estate PF Market

KB Kookmin Bank, KB Securities, KB Insurance, KB Capital, KB Savings Bank Participate
Short-Term Bridge Loans Held by Real Estate Projects Refinanced into 1-Year Bridge Loans

KB Financial Group (Chairman Yoon Jong-kyu) announced on the 13th that it will support liquidity for real estate project financing (PF) businesses by issuing approximately 500 billion KRW worth of collateralized debt obligations (CDOs).

CDOs are derivative products that securitize financial institution loan receivables to create new cash flows. This CDO issuance will be conducted with investors including KB Kookmin Bank, KB Securities, KB Insurance, KB Capital, and KB Savings Bank.

The raised funds will be used to refinance 3-6 month bridge loans held by real estate projects involving large construction companies as contractors into 1-year bridge loans reflecting market interest rates. This support will enhance liquidity in the PF market and apply stable market interest rates, thereby resolving high-cost structures.

Bridge loans are ultra-short-term loans provided on the condition that the developer offers land as collateral or the participating contractor provides credit support, serving as a bridge until the main PF loan is executed at the construction stage.

KB Financial noted that since the second half of last year, an increasing number of real estate projects have faced difficulties refinancing bridge loans due to rising project costs and interest rate volatility, and promptly decided to support bridge loan securitization through this CDO issuance. The securitization execution date is scheduled for March 15.

A KB Financial official stated, "We judged that converting bridge loans into long-term loans is the top priority to stabilize the real estate PF market, which led us to pursue this liquidity support. We hope this measure will help the construction market and contribute to overcoming the 'Samgo' (high inflation, high interest rates, high exchange rates) era that the entire nation is striving to overcome."