ING and Korea Housing Finance Corporation (KHFC) have worked together to deliver the inaugural social covered bond in Asia. KHFC is a state-run enterprise responsible for enhancing the welfare of people and national economic development by supporting the Korean government’s housing welfare policy.
The proceeds of the social covered bond will be used to finance or refinance KHFC’s mortgage loan products, aimed towards providing stable and long-term housing finance in Korea. These include the Bogeumjari Loan and Didimdol Loan, which are designed to support moderate to low income households with an affordable mortgage loan and their first home purchase respectively.
ING acted as a joint lead manager and joint bookrunner for this five-year EUR 500 million bond, and is part of a syndicate of four banks. The bond issuance is backed by Korean residential mortgages, and rated AA2 by Moody’s and AA- by Fitch Ratings.
This is KHFC’s inaugural bond denominated in Euros and will enable KHFC to diversify away from the US dollar as a funding source.
“We are thankful to KHFC for firstly having the vision to adopt a social covered bond framework, and for working with ING to make it happen. Given the high cost of home ownership, and at times inadequate access to housing loans locally, we hope this bond will increase accessibility to affordable housing finance in South Korea,” said Young Chang Son, Branch Manager, ING Bank Seoul Securities.
This social covered bond issuance marks a significant first for ING in Asia Pacific, as the bank continues to deliver new sustainable financing solutions for its clients. Alongside the growing number of green loans and bonds that ING has delivered in the region, the bank has now completed Asia’s first social covered bond.
This bond issuance follow’s KHFC’s initial development of their social covered bond framework earlier in Q3 2018. The framework was prepared in compliance with the International Capital Market Association (ICMA)’s Social Bond Principles.
ING has been contributing to the development of ICMA Social Bond Principles which was introduced in 2017. This includes the introduction of guidelines for social bond impact reporting in June 2018, which aims to advance discussions on impact among issuers and investors for social projects.
The KHFC’s social covered bond is a good example how capital markets can address global challenges such as those exemplified in the United Nation’s Sustainable Development Goals (SDGs) through existing and new pool of liquidity. This social covered bond in particular is aligned with the UN SDG 11: “Sustainable Cities and Communities”.
A leading sustainability rating agency, Sustainalytics, has evaluated the transaction in a “second party opinion” report and acknowledged the social covered bond framework is “credible and impactful, and aligns with the four core components of the Social Bond Principles 2018”. 1
1 Sustainalytics’ “Second party opinion” report is available at https://www.sustainalytics.com/wp-content/uploads/2018/09/KHFC-Social-Bond-SPO-09072018-FINAL.pdf
Press enquiries
Lim Wei Shan
ING Bank N.V., Singapore Branch
+65 6539 7895 / +65 9027 3744
wei.shan.lim@asia.ing.com
About ING
ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s more than 52,000 employees offer retail and wholesale banking services to customers in over 40 countries.
ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).
Sustainability forms an integral part of ING’s strategy, evidenced by ING’s ranking in the banks industry group by Sustainalytics. ING Group shares are included in the FTSE4Good index and in the Dow Jones Sustainability Index (Europe and World), where ING is also among the leaders in the banks industry group.
ING in Asia
In Asia Pacific, ING offers wholesale banking across 14 markets, namely Australia, China, Hong Kong SAR, India, Indonesia, Japan, Malaysia, Mongolia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
ING’s regional presence includes a 13% stake in Bank of Beijing, China; a 30% stake in TMB Bank, Thailand; a 3.74% stake in Kotak Mahindra Bank, India as well as wholly owned ING Australia that offers retail and wholesale banking services.
IMPORTANT LEGAL INFORMATION
Elements of this press release contain or may contain information about ING Groep N.V. and/ or ING Bank N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/ 2014.
Projects may be subject to regulatory approvals.
Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to a number of factors, including, without limitation: (1) changes in general economic conditions, in particular economic conditions in ING’s core markets, (2) changes in performance of financial markets, including developing markets, (3) potential consequences of European Union countries leaving the European Union or a break-up of the euro, (4) changes in the availability of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit and capital markets generally, including changes in borrower and counterparty creditworthiness, (5) changes affecting interest rate levels, (6) changes affecting currency exchange rates, (7) changes in investor and customer behaviour, (8) changes in general competitive factors, (9) changes in laws and regulations and the interpretation and application thereof, (10) geopolitical risks and policies and actions of governmental and regulatory authorities, (11) changes in standards and interpretations under International Financial Reporting Standards (IFRS) and the application thereof, (12) conclusions with regard to purchase accounting assumptions and methodologies, and other changes in accounting assumptions and methodologies including changes in valuation of issued securities and credit market exposure, (13) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, (14) changes in credit ratings, (15) the outcome of current and future legal and regulatory proceedings, (16) operational risks, such as system disruptions or failures, breaches of security, cyber attacks, human error, changes in operational practices or inadequate controls including in respect of third parties with which we do business, (17) the inability to protect our intellectual property and infringement claims by third parties, (18) the inability to retain key personnel, (19) business, operational, regulatory, reputation and other risks in connection with climate change, (20) ING’s ability to achieve its strategy, including projected operational synergies and cost-saving programmes and (21) the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V. (including the Risk Factors contained therein) and ING’s more recent disclosures, including press releases, which are available on www.ING.com. Many of those factors are beyond ING’s control.
Any forward looking statements made by or on behalf of ING speak only as of the date they are made, and ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.Any forward looking statements made by or on behalf of ING speak only as of the date they are made, and ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.
This document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States or any other jurisdiction.
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