Increased Funding Demand Due to COVID-19 Impact... New Bond Listings Surpass 700 Trillion Won, 'All-Time High'

[Asia Economy Reporter Oh Ju-yeon] Last year, the demand for fundraising increased due to the impact of the novel coronavirus infection (COVID-19), resulting in the bond market reaching an all-time high in scale.

According to the Korea Exchange on the 13th, the amount of funds raised through new bond listings last year reached 769 trillion won, a 23.7% increase from 621.9 trillion won in 2019, surpassing 700 trillion won for the first time ever. The exchange explained that this was due to increased demand for funds related to COVID-19 response measures.

The scale of new listings by bond type was 236.1 trillion won for government bonds, 7.4 trillion won for local bonds, 363 trillion won for special bonds, and 162.5 trillion won for corporate bonds.

While new listings of government bonds, local bonds, and special bonds increased significantly, corporate bonds also saw a slight increase. Government bonds rose by 70.3 trillion won (42.4%) compared to the previous year, local bonds by 2.9 trillion won (64.4%), special bonds by 72.3 trillion won (24.9%), and corporate bonds by 1.6 trillion won (1.0%).

The outstanding balance of listed bonds also reached a record high. As of the end of 2020, the outstanding balance of listed bonds was 2,047.4 trillion won, surpassing 2,000 trillion won for the first time. This represents a 12.2% increase from 1,824.3 trillion won in 2019 and exceeded the nominal gross domestic product (GDP) size of 1,907.5 trillion won for the first time.

Due to the implementation of active fiscal policies, public sector bond listings increased significantly, while private sector listings were relatively sluggish.

The exchange analyzed, "Due to increased demand for fundraising to respond to COVID-19, bond listings through the government, policy banks, and public corporations increased significantly, and corporate bonds slightly increased due to refinancing issuance and increased funding demand amid domestic interest rate declines."

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