Shinbo, 770 Billion Won Funding Supplied to COVID-19 Affected Companies in May

Exterior view of the Credit Guarantee Fund headquarters

[Asia Economy Reporter Kwangho Lee] The Korea Credit Guarantee Fund announced on the 28th that it will issue asset-backed securities (P-CBO) worth 770 billion won this month to support smooth financing for companies affected by COVID-19.

This issuance, the largest scale so far this year, will provide 620 billion won in new funds and 150 billion won in refinancing to 33 large and medium-sized enterprises and 284 small and medium-sized enterprises.

The COVID-19 Response P-CBO guarantee, which began issuing in May last year, has supported a total of 5.5 trillion won in new funds to companies struggling due to COVID-19, such as movie theaters, large retailers, and shipping companies, and plans to issue an additional 2.4 trillion won by the end of this year.

Meanwhile, the Korea Credit Guarantee Fund has additionally prepared preferential measures for companies affected by COVID-19, following concerns that companies with deteriorated business performance due to COVID-19 last year might face difficulties in financing.

Small and medium-sized enterprises whose sales in 2020 decreased by more than 50% compared to the previous year due to COVID-19 can apply the average sales of the last three years instead of estimated sales based on past performance, and growth-potential SMEs such as those handling New Deal items, operating in key industries, or exporting companies can have their sales limits raised, thereby expanding support limits for companies affected by COVID-19.

In addition, the group limits for medium-sized and large enterprises have been expanded to 200 billion won (previously 150 billion won) and 400 billion won (previously 250 billion won), respectively, and an annual interest rate reduction benefit of about 0.2% is provided through lowering the subordinated bond acquisition ratio.

A Korea Credit Guarantee Fund official said, "Although vaccination is underway, the damage to companies caused by COVID-19 continues, so demand for P-CBO guarantees is expected to remain steady for the time being," adding, "We will faithfully fulfill the role of a safety net for the national economy through continuous support for companies affected by COVID-19."

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