Investment Trusts Reject Creditors' Plan on Builder

Investment trust companies rejected Thursday a bond proposal presented by the creditor banks of Hyundai Engineering & Construction Co.

The group of investment trust companies already holding Hyundai bonds said they would not acquire the new issue. But they said they may consider purchasing in securitized forms bundled with other corporate bonds to alleviate risks.

The firm's creditor banks proposed Wednesday the trust companies take on part of the new bonds. They suggested that the investment trusts roll over 540 billion won in maturing Hyundai bonds for three years and acquire newly issued bonds.

Discussions are ongoing about the degree of participation by creditors in the bailout of the troubled builder.

The trust companies have presented a list of conditions that include limiting their share of new bonds to a minimum and a payment guarantee of market yield.

Deputy Prime Minister Jin Nyun sided with the banks'.. "It may be difficult to ask the investment trust companies to take equity stakes in return for existing bonds," he said. But the trust firms should take on some of the burden for the investment decisions they made, he added.

by Kim Won-bae