Draft Fund to Acquire Up to 1 Trillion Securitized Bonds from Key Industry Partners

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[Asia Economy Reporter Kangwook Cho] The Industrial Stabilization Fund (ISF), established with a scale of 40 trillion won, will be actively deployed starting next week, beginning with suppliers in the key industries. Additionally, the support program for key industry suppliers has been finalized, and it was decided to acquire subordinated securitization bonds worth up to 1 trillion won.

On the 23rd, the 9th Fund Operation Deliberation Committee was held at KDB Industrial Bank, where support measures such as the operation of the working capital support program for key industry suppliers and the acquisition of subordinated securities by the fund were approved.

This program involves banks lending working capital to essential suppliers to maintain the industrial ecosystem, issuing securitization bonds based on the loan receivables, and selling them to the private sector and others.

The support scale for suppliers is up to 5.5 trillion won, and to this end, the fund will provide up to 1 trillion won in capital for the program.

An agreement among participating banks will be promptly concluded, and the program is planned to commence within next week.

The target companies are suppliers (small and medium-sized enterprises and mid-sized companies) within the industries eligible for ISF support. The selection of essential companies will be made collaboratively by the primary contractors and relevant ministries to maintain the industrial ecosystem. The use of funds is for new working capital to resolve management difficulties caused by COVID-19 (use for repayment of existing bank loans is prohibited).

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