Corporate bonds

Korean Inc. stock issuance fell 80% and corporate bonds 57% amid soured sentiment

Stock issuance by Korean companies plunged nearly 80% and bonds nearly 60% in May from a month earlier to underscore deteriorating funding conditions for Korean Inc.

According to data released by the financial watchdog on Friday, equity issuance fell 78.7% on the month to 742.3 billion won in May from April, when Samsung Biologics issued an offer of rights worth 3.2 trillion won ($2.4 billion) to fund the acquisition of the entire stake. property of Samsung Bioepis.

Initial public offerings (IPOs) jumped 53.5% on the month to 98.4 billion won, mostly on a small scale, to debut on the Kosdaq.

Five companies made secondary and rights offerings of 2.78 trillion won, plunging 81.2 percent from the previous month.

Debt issuance in May came to 18.67 trillion won, up 12.4 percent from the previous month. But corporate bond issuance fell 57.1% to 2.14 trillion won from the previous month in a soured market.

Medium-to-long maturity paper issuance fell 25.2% over the month, leading to a 45.5% drop in debt issuance for refinancing, 63.3% for operating and 74.6 % for facilities.

Obligations rated AA or better accounted for 76.1% of total issues and mainly medium and long term.

Financial institutions sold 15.55 trillion won of debt, up 54% on the month to fund rising demand for business loans, while asset-backed securities fell 35.7% on the month at 978.3 billion won.

Outstanding corporate bonds stood at 633.989 billion won at the end of May, up 0.4 percent from the previous month.

Combined stock and bond issuance came to 19.4 trillion won, down 3.5 percent from the previous month.

Commercial paper issuance rose 5.4% on-month and 14.8% on-year to 38.396 billion won and short-term debentures rose 13% on-month and 6.8% on-year. year to reach 113.98 trillion won.

By Susan Lee

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]