Korea Housing Finance Corp Issues 800 Million Euro Green Covered Bonds

First Green Bogeumjari Loan Used as Underlying Asset by a Public Institution

Korea Housing Finance Corporation announced on the 25th that it has successfully issued green covered bonds worth 800 million euros to strengthen its Environmental, Social and Governance (ESG) management and expand eco-friendly housing finance.

The corporation explained that this issuance is highly significant in that, for the first time among domestic public institutions, it has issued green covered bonds backed by the eco-friendly housing finance product "Green Bogeumjari Loan" as the underlying asset. The Green Bogeumjari Loan is a product that applies a preferential interest rate of 0.1 percentage point when taking out a Bogeumjari Loan secured by a home certified as a green building or a zero-energy building.

The bonds have a maturity of five years, and the coupon rate was set at 2.696%, which is the five-year euro mid-swap rate (2.406%) plus a spread of 0.29 percentage point. The corporation stated that this spread is the lowest level since the covered bonds it issued in March 2022.

By investor type, asset management companies accounted for the largest share at 37%, followed by central banks and international organizations at 23%, and banks and others at 40%. A corporation official said, "This issuance is an important milestone in simultaneously achieving an eco-friendly residential culture and revitalizing green finance," adding, "We will actively participate in the government's carbon neutrality and green finance promotion policies and take the lead in our role as an eco-friendly public institution." Meanwhile, the corporation added that since March 2019 it has been issuing covered bonds in the form of ESG bonds, such as social bonds, and has been continuously expanding such bond issuance.