Corporate Bonds Soar Amid Low Interest Rates... "Last Year's Issuance Hits Record High"

[Asia Economy Reporter Jeong Hyunjin] Last year, the global corporate bond issuance volume exceeded $2.5 trillion (approximately 2,904 trillion KRW), setting a record high due to the low interest rate environment.

On the 12th (local time), a UK-based economic media outlet, citing data from market research firm Dealogic, reported that last year's corporate bond issuance volume was $2.5 trillion, surpassing the previous record set in 2017.

The reason for the sharp increase in corporate bond issuance last year was that major central banks repeatedly cut interest rates to prepare for an economic recession, maintaining a low interest rate environment in the market. With lower costs associated with bond issuance, companies issued bonds to secure funds in advance. Ashif Sherani, Director of HSBC's Bond Syndicate Division, stated, "Central bank policies played a key role in what happened now," and evaluated that "they definitely contributed to the surge in corporate bond issuance."

The problem is that while the surge in corporate bonds helps reduce corporate financing costs to improve the economy, it also carries the risk of expanding debt. Recently, some financial institutions, including the World Bank, have expressed concerns that the rapidly increasing debt "increases vulnerability to external shocks."

Regarding this, economic experts are closely monitoring the current situation and predict that no immediate problems will arise in the short term.

This content was produced with the assistance of AI translation services.