LH issues $193 mn Brazilian bonds

Korea Land & Housing Corporation (LH) announced on Tuesday that it had issued Brazilian real-denominated bonds worth approximately 270 billion won ($193 million) with a maturity of two years on April 15.

This issuance marks the largest private bond offering by a non-financial public corporation since 2020. It is the first instance of a Brazilian real-denominated bond successfully issued by such an entity.

Citigroup exclusively managed the bond issuance, which features a fixed interest rate for the two-year maturity.

After a currency swap, LH explained that the interest rate is over 0.5 percentage points lower annually than comparable domestic Korean won bonds, resulting in financial cost savings of over 3 billion won.

LH is actively pursuing the issuance of foreign bonds to secure stable resources, leveraging its high international credit rating.

This issuance of Brazilian real-denominated bonds is part of this strategy.

LH holds an AA international credit rating, reflecting high stability due to government provisions that cover losses in public projects.

LH plans to diversify its overseas issuance markets to hedge market risks and attract new investors.

In 2023, LH issued $780 million in foreign bonds, including US-dollar public bonds and Singapore-dollar private bonds.

Facing substantial investment needs, such as the construction of a third new city this year, LH plans to raise $1.2 billion through foreign bonds, including the recent Brazilian bond issuance.

Write to Oh-Sang Yoo at osyoo@hankyung.com