LH Issues 440 Billion KRW ESG Bonds "First Domestic Social Bonds"

Used for construction rental housing such as Happy Housing, permanent, national, and 10-year public rental housing
Plan to expand ESG bonds to 50% of total bond issuance by 2024

[Asia Economy Reporter Kangwook Cho] Korea Land and Housing Corporation (LH) announced on the 20th that it has issued social bonds, one of the ESG (Environmental, Social, and Governance) bonds, worth 440 billion KRW. This is LH's first social bond issuance in South Korea.

The social bonds consist of 3-year bonds worth 100 billion KRW, 5-year bonds worth 190 billion KRW, and 30-year bonds worth 150 billion KRW. LH explained that the issuance interest rates were set between 2.034% and 2.369%, which is 0.02 to 0.03 percentage points lower than the market interest rates.

LH stated, "The success in issuing bonds at interest rates lower than the market rates appears to stem from investors' expectations for LH's entry into the domestic ESG bond market, as LH carries out national housing stability policies such as the promotion of the 3rd New Towns and the supply of rental housing."

LH plans to use the funds raised through this bond issuance for construction costs of rental housing buildings, including permanent rental, national rental, Happy Housing, and 10-year public rental housing currently under construction this year.

LH also plans to issue social bonds worth 130 million USD (approximately 150 billion KRW) overseas within this year. Furthermore, it aims to expand the proportion of ESG bonds to 50% of the total bond issuance amount by 2024.

Since LH first issued social bonds to overseas investors in 2018 as the first public enterprise to do so, it has issued a total of 1.09 billion USD worth of social bonds up to this year. The proceeds from social bonds have been used for housing welfare projects such as the construction and supply of rental housing, supply of purchased rental and jeonse rental housing, and operation and management of rental housing. In May this year, LH issued green bonds worth 630 billion KRW for the first time and is using all proceeds for the green remodeling project of aging public rental housing and energy-saving housing construction projects.

An LH official expressed expectations that "this large-scale social bond issuance will contribute to expanding the foundation of the domestic ESG sector."

This content was produced with the assistance of AI translation services.