Korean Companies Turning To Bond Market for Capital

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Korean Companies Turning To Bond Market for Capital

Faced with the difficulty of issuing share in the sagging stock market, Korean corporations are turning to the local bond market to raise capital.

The Financial Supervisory Service said Monday that domestic companies raised a total of 21.7 trillion won ($16.3 billion) through direct financing for the three months through March, up 20.6 percent from the same period last year.

Of that total, bond issues, excluding asset-backed securities, accounted for 8.1 trillion won, compared with 2.6 trillion won a year earlier, it said.

The floatation of BBB-rated corporate debt surged to 2.8 trillion won in the first quarter from 550 billion won during the same period last year. Bonds with maturities of two years or more accounted for 80.3 percent of the first-quarter debt issues, compared with 71.6 percent a year earlier.

Companies issued new shares of 4.6 trillion won during the January-March period, up 21.7 percent from a year earlier.

Korea Telecom IMT and SK IMT raised a combined 3.4 billion won via initial public offerings in February, but new share sales by other businesses actually shrank. No other firms offered new shares on the Korea Stock Exchange during the first quarter, but eight companies raised a total of 55.7 billion won in the Kosdaq mark



by Chung Sun-gu

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