Financial Services Commission: "COVID Support P-CBO, First 500 Billion KRW Supply by End of Next Month"

Son Byung-du, Vice Chairman of the Financial Services Commission (far left)

[Asia Economy Reporter Kim Hyo-jin] Financial authorities have decided to supply 500 billion KRW worth of Primary Collateralized Bond Obligations (P-CBO) in the first round by the end of next month to support companies affected by the novel coronavirus disease (COVID-19).

On the 9th, Sohn Byung-doo, Vice Chairman of the Financial Services Commission, stated at a financial situation review meeting, "We will support corporate bond issuance demand from companies that the Bond Market Stabilization Fund finds difficult to purchase through P-CBO and the rapid corporate bond underwriting system." Applications for P-CBO support will be accepted until the 14th.

Regarding the rapid corporate bond underwriting system, Vice Chairman Sohn said, "We plan to finalize detailed agreements with related institutions within this week and, depending on corporate demand, support for corporate bond refinancing will begin as early as the refinancing occurring in May."

Vice Chairman Sohn added, "Until the P-CBO and rapid corporate bond underwriting system are fully operational, we will utilize the Korea Development Bank and Industrial Bank of Korea's own corporate bond and commercial paper (CP) purchase programs to ensure there is no gap in support."

Meanwhile, the Financial Services Commission plans to revise the indemnity system regulations by mid-month to ensure the timely implementation of the 'Livelihood and Financial Stability Package Program.' This includes clearly defining indemnity targets in advance and encouraging financial companies to improve their own indemnity systems so that the indemnity system can be effectively operated.

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