Bond sales leave more flush for cash

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Bond sales leave more flush for cash

Direct financing by Korean companies rose 14.1 percent on-month in October as borrowing conditions remained favorable on the central bank’s low-rate policy amid a flagging economy, the financial regulator said yesterday.

Local companies raised 13.6 trillion won ($12.3 billion) last month by issuing stocks and bonds, compared with 11.8 trillion won a month earlier, according to the Financial Supervisory Service (FSS).

Corporate bond issuances reached 13.4 trillion won in October, up 13.3 percent from the previous month as financial firms opted to secure funds on the back of low borrowing costs, the FSS said.

The Bank of Korea cut the benchmark 7-day repo rate by a quarter point to 2.75 percent in October following the same margin cut the previous month.

The debt sales in asset-backed securities (ABS) fell 15.5 percent to 315.7 billion won over the cited period, and those sold in bank debentures surged 42.8 percent to 2.94 trillion won, it said.

Local companies’ direct financing through selling shares more than doubled to 146.4 billion won in October, but the overall amount remained low with only one IPO and seven rights offerings logged for the month.

Yonhap

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