KHFC steals a march with $500 million covered bond

The state-owned mortgage agency exploits an exemption to tap the covered bond market before Korea's regulator launches a standardised framework.

Korea Housing Finance Corporation KHFC priced a $500 million covered bond late last night, ahead of new rules that will create a level playing field for would-be issuers.

The state-owned agency priced the five-and-a-half-year issue at 100bp over US Treasuries, which the leads described as a significant discount to the theoretical value of a new senior issue.

KHFC is rated Aa3 by Moody’s, A by Standard Poor’s and AA- by Fitch the same as Korea Development Bank KDB and Export-Import Bank Korea Kexim but its covered bonds are rated a couple of notches higher at triple-A.

The joint leads Citi, Nomura and...

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