Kim & Chang advised the Korea Housing Finance Corporation (the “KHFC”) on designing new covered bond transaction structures that incorporate various issuance frameworks appropriate for the domestic financial market, and provided a draft of the related agreements. Our firm also delivered comprehensive legal guidance by developing transaction structures, drafting agreements and reviewing the KHFC Act, among others. We facilitated the KHFC’s payment guarantee to covered bonds to be issued by Korean commercial banks and its designation as an “innovative financial service” under the Financial Innovation Support Act of Korea, along with the drafting of amendments to the KHFC Act.

Although the KHFC was unable to guarantee covered bonds under the Covered Bond Act of Korea or issue a trust beneficiary certificate based on these bonds under the KHFC Act, our firm assisted it to be designated as an innovative financial service by the Financial Services Commission in order to enable the abovementioned transactions. This involved effectively coordinating the complex interests of all relevant parties. As a result, the KHFC guaranteed covered bonds with maturities of five and ten years, ensuring a stable supply of long-term bonds to the domestic bond market.