Government Approves State Guarantee Proposal for 40 Trillion Won Period Industry Stability Fund Bonds at Cabinet Meeting

[Asia Economy Reporter Kim Hyunjung] The government held an extraordinary Cabinet meeting on the weekend of the 25th and approved a state guarantee consent proposal for the issuance of bonds worth 40 trillion won for the Period Industry Stabilization Fund.

This is a follow-up measure to the government's plan to establish the 'Period Industry Stabilization Fund for Crisis Overcoming and Employment' to support seven major period industries temporarily facing difficulties due to the novel coronavirus infection (COVID-19), including aviation, shipping, shipbuilding, automobile, general machinery, electricity, and telecommunications.

The Ministry of Economy and Finance announced that at the Cabinet meeting held that day, it reviewed and approved the 'State Guarantee Consent Proposal for the Principal and Interest Repayment of Period Industry Stabilization Fund Bonds Issued in 2020.'

At the 5th Emergency Economic Meeting held on the 22nd, presided over by President Moon Jae-in, the government announced that to promptly normalize management and stabilize employment of period industry companies, it would establish the Period Industry Stabilization Fund at the Korea Development Bank and provide a state guarantee for fund bonds up to 40 trillion won.

The Period Industry Stabilization Fund bonds will be purchased in the market by institutional investors such as banks and pension funds, and the government will provide a guarantee up to a maximum of 40 trillion won so that they can purchase without worrying about default. The fund will be operated for a limited period of five years.

To ensure timely support for period industries, the government held an extraordinary Cabinet meeting on a holiday without waiting for the regular Cabinet meeting on the 28th and approved the state guarantee consent proposal for the issuance of fund bonds, which will soon be submitted to the National Assembly.

The Ministry of Economy and Finance stated, "Through the state guarantee for fund bonds, we expect to enhance the creditworthiness of the bonds and facilitate fundraising, thereby stably securing financial resources to support period industry companies."

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