On Thursday, Korea Housing Finance Corporation (KHFC) closed a $500 million covered bond. The deal is the country’s first statutory offering – but supplementary contracts were needed to fill gaps in the legislation.
Only the second covered bond in Korea, the deal utilised Article 31 of the KHFC Act which provides for “mortgage-backed securities” or, in this case, covered bonds. But with only a few paragraphs outlining the structure, the statute was supplemented with contractual arrangements that mimic European practice.
Michael Durrer of Sidley Austin advised the lead managers on the deal: “This is not a carbon copy of...