KB Financial Group Provides 500 Billion KRW Liquidity Support for Real Estate PF

KB Financial Group is issuing collateralized debt obligations (CDOs) worth 500 billion KRW.

According to KB Financial on the 6th, they are in the final stages of coordinating the issuance of CDOs with each affiliate to support liquidity for construction companies' real estate project financing (PF) businesses.

CDOs are derivative products securitized based on financial institutions' loan receivables and other underlying assets.

KB Financial is leading the issuance, with KB Kookmin Bank and KB Insurance participating as senior investors, and KB Securities participating as a subordinated investor. It is also reported that the Korea Development Bank invested approximately 50 billion KRW.

The raised funds will be used to refinance bridge loans that have not been converted into the main PF for major construction companies' metropolitan area projects, such as Hyundai Construction and Lotte Construction.

The purpose is to replace bridge loans with one-year maturity loans to provide short-term liquidity.

Earlier, financial authorities also identified real estate PF deterioration as a risk factor this year and announced plans to strengthen proactive management.

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