HF Successfully Issues EUR 800M in Covered Bonds 

- Flexible funding strategy and diversified investor base help achieve record-low issuance spread

Korea Housing Finance Corporation (HF, CEO Kim Kyung-Hwan) announced on October 1 that it successfully issued EUR 800 million (approximately KRW 1.3 trillion) in social covered bonds to maintain a stable supply of policy mortgages amid volatility in global financial markets.

The bonds received ratings of Aaa from Moody’s and AAA from S&P. With a three-year maturity, the bonds were priced at 3.270%, comprising the three-year euro mid-swap rate of 3.100% plus a spread of 17 basis points (0.17%p).

Investor orders totaled EUR 2.14 billion, well above the EUR 800 million issuance size, with demand reaching approximately 2.7 times the amount issued. This strong demand enabled HF to achieve its lowest-ever issuance spread. By investor type, ▲ banks accounted for 43% of orders, followed by ▲ asset managers (30%), ▲ central banks and international organizations (9%), and ▲ other investors (18%).

HF CEO Kim Kyung-Hwan said, “By issuing covered bonds in both British pounds and euros this year, HF has diversified its funding currencies and investor base. We will continue to secure stable funding by flexibly responding to global market conditions and investor demand.”

Since March 2019, HF has issued all its covered bonds as social bonds* or other ESG-labeled bonds, helping lead the market for environmental, social, and governance (ESG) bonds.

 * Social bonds are debt securities issued specifically to raise funds for projects that generate social value, including housing supply, housing welfare, support for vulnerable populations, and education.