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LH Emerges as Dominant Issuer in Public Bond Market, Raising Supply Concerns
Finance · Finance/Rental/Leasing · yonhap_finance · 2026-09-08
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Korea Land and Housing Corporation (LH) is set to become the primary issuer of public bonds, sparking fears of market supply imbalances and rising rates.
What Happened
LH's Dominance: Korea Land and Housing Corporation (LH) has emerged as the central player in the public bond market due to its role in executing government housing and infrastructure policies. Unlike Korea Electric Power Corporation (KEPCO), whose financial structure is improving, LH faces a sharp rise in debt.
Financial Burden: According to government financial management plans, LH's debt is projected to reach 372 trillion won by 2030. This surge is driven by heavy upfront investments in projects like the 3rd new towns, coupled with delayed capital recovery due to high interest rates.
Market Impact: Financial analysts are concerned that LH's massive bond issuance will absorb market liquidity, leading to a 'crowding-out' effect for other corporate issuers. LH is expected to account for approximately 80% of the total debt increase among public institutions.
Expert Analysis: Experts warn that the significant increase in LH's net bond issuance starting next year could exert upward pressure on interest rates across the bond market. The consensus is that the market's supply trend is shifting, with LH effectively replacing KEPCO as the primary driver of public bond supply.