Shinbo, "Including SMEs"... Issuance of P-CBO Worth Approximately 520 Billion Won

Credit Guarantee Fund Headquarters
Photo by Credit Guarantee Fund

[Asia Economy Reporter Song Seung-seop] The Korea Credit Guarantee Fund (KODIT) is including small and medium-sized enterprises (SMEs) in the P-CBO support targets for the first time.

On the 30th, KODIT announced that it will issue P-CBOs worth 520 billion KRW to support smooth funding for companies affected by COVID-19 and others.

P-CBO (Partial Credit-Backed Obligation) is a guarantee system that supports companies in raising long-term funds directly from the financial market. It is structured by securitizing corporate bonds issued by individual companies as underlying assets.

The eligibility criteria are BB- or higher credit rating for large and mid-sized companies, and K9 or higher internal evaluation rating by KODIT for SMEs. SMEs with audit reports must have a K10 or higher rating.

Until last year, P-CBO was limited to large and mid-sized companies. However, this month, new funds of 450 billion KRW will be provided to 1 large company, 16 mid-sized companies, and 82 SMEs.

The average funding cost including subordinated securities acquisition is in the 2.9% range annually for large and mid-sized companies, and in the 3.5% range for SMEs.

A KODIT official stated, “Considering the demand from companies, we plan to issue monthly, and the review for the April issuance is currently underway,” adding, “We will continue to play a strong supporting role for our economy by actively providing stable long-term funds to companies suffering from prolonged COVID-19 difficulties.”

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