Koramco Issues 30 Billion Won in Corporate Bonds at Industry’s Lowest Interest Rate

Securing Funding at Over 1.5 Percentage Points Lower Than Industry Average
Supported by Strong Credit Ratings and Solid Financial Structure
Enhancing Subsidiary Competitiveness and Expanding New Investments

Koramco REITs Management & Trust announced on September 30 that it has issued 30 billion won worth of unsecured private placement bonds. The three-year corporate bonds were set at an annual interest rate of 3.95%, the lowest in the industry. This rate is more than 1.5 percentage points lower than the recent average bond rates of 5.5-6.5% seen in the real estate finance sector.

The funds raised will be used to strengthen the competitiveness of core businesses, including participating in a paid-in capital increase for its subsidiary Koramco Asset Management and expanding principal investment (PI) activities. Koramco REITs Management & Trust aims to further solidify its position as a comprehensive real estate financial platform encompassing REITs, funds, and trusts.

The company was able to secure funding at the lowest interest rate in the industry thanks to its top-tier credit rating and stable financial structure. As of the end of June, Koramco REITs Management & Trust had total consolidated assets of 690.5 billion won and equity capital of 541.9 billion won, resulting in a debt ratio of only about 28%. Based on this, Korea Ratings assigned the company a credit rating of 'A'. NICE Ratings has also awarded it an 'A (Stable)' rating, the highest in the industry, for eight consecutive years.

Koramco REITs Management & Trust and its subsidiary Koramco Asset Management continue to achieve meaningful results even amid a downturn in the commercial real estate market. In the trust sector, the company reduced the proportion of non-performing assets from 57% to 44%, marking the most significant improvement in asset quality in the industry. The completion-guaranteed land trust business, which has long been a burden for the real estate trust sector, will see all projects completed by the end of this year. The company will thus be free from completion guarantee risks.

Major office building transactions such as Hyundai Motor Securities Building, Bundang Doosan Tower, and Center Point Gwanghwamun have been successfully completed. The company is strengthening its market presence by closing a series of large deals, including the acquisitions of Gwanghwamun Crescendo Building, The Exchange Seoul, and NH NongHyup Capital Building.

Koramco Asset Management has shown outstanding performance in digital infrastructure investments. Last week, the company held a commissioning ceremony for the K Square Data Center Gasan and began full-scale operations. It is simultaneously developing three new data centers nationwide in Seonggok, Ansan; Yonghyeon, Uijeongbu; and Jangnim, Busan. Koramco is also demonstrating its fundraising capabilities by attracting capital from major domestic and global institutional investors, including blind funds from the National Pension Service and the Military Mutual Aid Association, and by establishing a joint venture with global asset manager Starwood Capital Group.

Significant organizational changes are also underway. The sector- and work-based expert system introduced earlier this year has quickly taken root, and investment sector performance is becoming visible. The company also forecasts substantial growth in assets under management (AUM). Koramco's AUM increased from 33 trillion won at the end of last year to about 35 trillion won in the first half of this year. The company plans to expand its total AUM to 50 trillion won by 2028.

The capital raised and paid-in capital increase are also expected to elevate the scale of its subsidiary Koramco Asset Management. Koramco Asset Management has presented a vision to become the largest digital infrastructure investment platform in Korea by investing about 10 trillion won in digital infrastructure sectors such as data centers by 2028.

Jung Seunghoe, CEO of Koramco REITs Management & Trust, stated, "Securing the industry's lowest funding rate even in a challenging capital market is a result of the market's trust in Koramco's high creditworthiness and growth potential." He added, "With this bond issuance as a catalyst, we will further solidify our position as Korea's largest comprehensive real estate financial company by strengthening the competitiveness of our subsidiaries and expanding new investments."

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