Shinbo to Provide 1.2 Trillion Won in Funding This Month to Companies Affected by COVID-19

[Asia Economy Reporter Ki Ha-young] The Korea Credit Guarantee Fund (KODIT) announced on the 26th that it has provided 1.2 trillion won in funding through securitization company guarantees to companies affected by the novel coronavirus disease (COVID-19) and key industries.

KODIT's securitization company guarantee system supports companies in raising long-term funds directly from the financial market by issuing securitized securities based on corporate bonds issued by individual companies.

As the economic downturn caused by COVID-19 has prolonged, following the provision of 1.2 trillion won through securitization company guarantees at the end of May, the same amount was supported again this month.

In the June issuance, 700 billion won was prioritized for companies directly affected by COVID-19, such as CJ Foodville (food service), Janggeum Shipping (shipping), Seoyeon E-Hwa (auto parts), and Hanse Industrial (clothing manufacturing), as well as credit finance companies that actively participated in principal and interest repayment deferrals for small business owners.

Additionally, 320 billion won was supplied to government-designated key industries such as automobiles, shipbuilding, petrochemicals, and displays, as well as material, parts, and equipment companies, contributing to strengthening the competitiveness of key industries.

KODIT's securitization company guarantee is virtually the only financial means for low-credit companies below investment grade, which find it difficult to issue bonds in the market, to raise funds through corporate bonds. Among the companies supported by securitization company guarantees in June, about 60%, or 43 companies (based on mid-sized and large companies), were rated BB.

A KODIT official stated, "As the COVID-19 crisis prolongs, companies' financial difficulties continue, and applications for securitization company guarantees are expected to steadily increase. KODIT will continue to play a strong supporting role by providing stable long-term funds to companies struggling with liquidity shortages to prevent our economy from falling into recession."

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