Singapore-based lender United Overseas Bank (UOB) has signed a memorandum of understanding with Korea Housing Finance Corporation (KHFC) to collaborate on investment banking, environmental, social and governance (ESG) finance and cash.
The Korean state-owned finance company aims to expand its presence in Southeast Asia, including Singapore, Indonesia, Malaysia, Vietnam and Thailand.
The two companies will cooperate in issuing regular bonds and covered bonds. UOB will help KHFC expand the investor base for its mortgage-backed securities (MBS) under the bank’s ESG-related financing frameworks.
The Singaporean bank will also provide KHFC with treasury services such as derivative transactions to hedge foreign exchange risk, as well as cash management services. KHFC’s Singapore branch, which opened May 11 at the Marina Bay Financial Centre, is its first overseas venture.
UOB started working with KHFC in 2019, when the bank established its financial institution unit in Korea. In 2020, UOB invested in the bank’s first Korean won-denominated social MBS issued by KHFC. UOB was also KHFC’s first foreign investor in its MBS. Social MBS was previously only available for the Korean market, but thanks to UOB’s investment, KHFC was able to reach a number of foreign investors.
