LH Issues $500 Million Public Bonds with Minimum Additional Interest Rate

Issued 3-Year Non-Financial Public Enterprise Bonds with Minimum Spread of 55bp This Year
Increased Proportion of Quality Investors Including Global Central Banks and Pension Funds

Korea Land and Housing Corporation (LH) announced that it will issue public bonds worth 500 million USD (approximately 680 billion KRW) on the 22nd, setting the issuance conditions at the lowest spread rate. This marks the first issuance of dollar-denominated public bonds in one year since the 700 million USD public bond issuance in September last year.

The maturity is 3 years, and the issuance interest rate is set at the US Treasury yield (3-year) plus 55 basis points. This is the lowest spread rate among 3-year bonds issued by non-financial public enterprises over the past three years. LH succeeded in reducing the initial offered spread of 85 basis points by 30 basis points, based on more than four times the high-quality investment orders from global central banks, pension funds, and banks.

Prior to this issuance, LH received credit ratings of ‘AA’ and ‘Aa2’ from international credit rating agencies S&P and Moody’s, respectively, which are equivalent to the national credit rating. The deal was led by Citigroup, BNP Paribas, and Standard Chartered.

LH raised approximately 1.43 billion USD (about 1.9 trillion KRW) overseas this year to ensure smooth implementation of government policies such as the development of the 3rd new town and advanced industrial complexes, and the expansion of purchase rental supply, as well as to accelerate housing supply.

In particular, LH is diversifying its funding sources to alleviate domestic market burdens, including issuing Brazilian Real-denominated bonds for the first time among non-financial public enterprises this year.

Lee Sang-wook, Vice President of LH, stated, “This issuance has become an opportunity to reaffirm overseas market confidence in LH’s financial status,” and added, “We will prepare various funding plans, including overseas bonds, to stably support government policies such as expanding housing supply and developing advanced industrial complexes.”