Firms' Money Hunt Easier In Resurgent Bond Market

Korean corporations tapped the local bond market during the first two months of this year to raise cash more than three times as much as they did a year earlier, according to the Financial Supervisory Service on Wednesday.

The financial watchdog said that domestic companies scooped up 6.95 trillion won ($5.44 billion) of capital in January and February, up about 350 percent from the same period last year.

Notably, it added, BBB-rated businesses raised 2.29 trillion won during the two months, up nearly seven-fold from the comparable period in 2000. "The credit crunch in the local corporate debt market is easing," said Kim Sung-wook, an official at the watchdog agency.

Maturities are lengthening. Bonds with maturity of over two years accounted for 84 percent of the total
debt issuance, compared with 72 percent a year earlier, the agency said.

Stock sales also jumped. Local firms secured 3.87 trillion won by new stock issuances in the two-month span, up 39 percent from a year earlier.

The watchdog attributed the surge in stock issuance to large rights issues carried out by two new companies, Korea Telecom IMT and SK IMT, which will provide next-generation mobile phone services.

by Kim Hyun-chul