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Samsung Electronics buying up large amounts of local debt

Samsung Electronics is emerging as a major player in its local debt market, buying more South Korean-issued bonds as it juggles a $60 billion cash pile.

Samsung’s push into private bank debt and government bonds underscores the challenges faced by the electronics giant in managing its massive cash holdings, with local banks reluctant to overload on short-term deposits from Samsung.

The world’s biggest smartphone maker bought more than two-thirds of a 300 billion won ($294.75 million) 2-year debt issue on Friday by Kookmin Bank, a unit of KB Financial Group Inc, a person with direct knowledge of the matter said.

Dealers also said the company bought nearly 300 billion won worth of three-year treasury bonds late last month.

While it is not unusual for Samsung to buy local bonds, dealers said it has typically bought paper issued by highly rated government-backed financial firms like Korea Development Bank and Korea Finance Corp.

“I think Samsung is diversifying their holdings and spreading out their maturities,” said Hanwha Securities fixed-income analyst Kong Dong-rak. Reuters (credit for the last brief story only)