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

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 infection (COVID-19).

On the 9th, Sohn Byung-doo, Vice Chairman of the Financial Services Commission, announced this plan at a financial situation review meeting, stating, "Demand for corporate bond issuance by companies that the Bond Market Stabilization Fund finds difficult to purchase will be supported 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 will 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.

According to the Financial Services Commission, from February 7, when the government first announced financial support measures for small business owners related to COVID-19, until the 6th of this month, a total of 319,000 cases and 28.3 trillion KRW in financial support have been provided over two months.

This includes 13.7 trillion KRW in new loans and guarantees, 13.5 trillion KRW in maturity extensions for existing loans and guarantees, and 1.1 trillion KRW in other measures such as interest payment deferrals. Policy financial institutions handled 13.2 trillion KRW, while private financial companies such as banks managed 15.1 trillion KRW.

Meanwhile, the Financial Services Commission established an Emergency Financial Support Team on the 6th to ensure the swift and smooth implementation of the 'Livelihood and Financial Stability Package Program' in response to COVID-19.

The team leader is Lee Se-hoon, Director of the Financial Policy Bureau. Lee Jin-soo, former Global Finance Division Chief, serves as Emergency Finance Division Chief within the support team, and Jeon Soo-han, former Secretary overseeing policy finance, is the Implementation Support Team Leader, managing practical operations.

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