Korea Housing Finance Corporation opened books for its first benchmark covered bond in over two years today (Thursday), setting initial price thoughts of the 95bp over mid-swaps area for a $500m (Eu465m, Won577bn) five year issue.

The new issue comes after Kookmin Bank priced a $500m five year benchmark at 90bp over mid-swaps on 14 October. That deal was the first South Korean covered bond since KHFC last tapped the market, when it sold a $500m five year in February 2013.

Leads BNP Paribas, Société Générale and Standard Chartered today launched the new $500m no-grow five year issue with initial price thoughts of the 95bp over mid-swaps area. A syndicate official at one of KHFC’s leads said that guidance would be set later in the afternoon, to give US accounts an opportunity to assess the deal.

The lead syndicate official said the Kookmin debut was the most appropriate comparable for KHFC’s new issue, and said that, ahead of KHFC’s announcement, that deal was quoted at 80bp-85bp, mid. He noted that the last US dollar benchmark covered bond, a $1bn five year issue from Westpac on Monday of last week (2 November), was priced at 80bp over mid-swaps.

Kookmin’s deal was the first launched under a dedicated South Korean covered bond law that came into effect last year. As previously reported, KHFC, despite being able to issue under the new legislation, has however chosen to launch its new issue under legislation specific to the state-owned institution, as it has done since debuting in 2010.