HF Issues Covered Bonds Overseas
- Date 2017-10-31
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HF Issues Covered Bonds Overseas
- Financing costs lowered for policy mortgage loan users
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) stated on October 31, 2017, that it issued 500 million dollars of five-year covered bonds* overseas that day.
* Covered bonds are debt securities issued by a financial institution and collateralized against a pool of assets. Although they are similar to mortgage-backed securities, they are a more reliable source of funds because they cover claims in case of failure of the issuer.
< Spreads of HF Covered Bonds Issued Overseas >
Classification | 1st Issuance | 2nd Issuance | 3rd Issuance | 4th Issuance | 5th Issuance | 6th Issuance |
Issuance Date | ’10.7.15 | ’11.7.25 | ’13.3.7 | ’15.11.19 | ’16.10.11 | ’17.10.31 |
Spread between HF Covered Bonds and 5-yr Treasuries | 2.35%p | 2.18%p | 1.00%p | 0.90%p | 0.85%p | 1.00%p |
Bonds Issued | $500 ML | $500 ML | $500 ML | $500 ML | $500 ML | $500 ML |
In its sixth round of covered bond issuance, HF selected Mirae Asset Daewoo as one of its co-sponsors, giving the domestic financial institution an opportunity to build its expertise in issuing covered bonds. HF expects that its covered bonds backed by mortgage loans with a high level of safety will play a critical role in securing foreign funds even at times of difficulty in international financial markets.