KB and Shinhan Bank Issue 300 Billion KRW Housing Finance Corporation Guaranteed Bonds

Shinhan Utilizes Funds for 10-Year Cycle Mortgage Loans

KB Kookmin Bank and Shinhan Bank are raising funds by issuing bonds worth 300 billion KRW each, guaranteed by the Korea Housing Finance Corporation. Shinhan Bank will use these funds for 10-year fixed-rate mortgage loans.

According to the financial sector on the 9th, Shinhan Bank plans to issue Korea Housing Finance Corporation guaranteed covered bonds on the 13th. These bonds are securitized from high-quality assets held by Shinhan Bank (such as mortgage loan receivables), and by adding the Korea Housing Finance Corporation's payment guarantee, the issuance interest rate is lowered and the stability of the financial product is enhanced.

The funds raised at such a low interest rate will be used as resources for Shinhan Bank's 10-year fixed mortgage loans. The issuance conditions are ▲amount of 300 billion KRW ▲interest rate of 10-year government bond (closing price on the 9th) + 0.18 percentage points ▲term of 10 years.

In particular, Shinhan Bank established a management system in accordance with the International Capital Market Association (ICMA)'s Social Bond Principles to issue these guaranteed covered bonds as 'social bonds' contributing to the housing stability of low-income households.

KB Kookmin Bank also succeeded in issuing Korea Housing Finance Corporation guaranteed won-denominated covered bonds on the same day. The issuance scale is a total of 300 billion KRW (200 billion KRW for 5-year bonds and 100 billion KRW for 10-year bonds), and the issuance interest rates add 0.21 percentage points to the 5-year government bond (closing price on the 9th) rate and 0.18 percentage points to the 10-year government bond (closing price on the 9th) rate.