San Un "Extension of Corporate Liquidity Support Facility Purchase Period Until Year-End"

For Financing Low-Credit Companies Struggling Due to Prolonged COVID-19 Pandemic

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] The purchase period for corporate bonds and commercial papers (CP) by the Special Purpose Vehicle (SPV), which includes low credit rating bonds, will be extended until the end of the year.

On the 30th, KDB Industrial Bank announced that, together with the government and the Bank of Korea, it has decided to extend the SPV purchase period until the end of the year to facilitate funding for low-credit companies struggling due to the prolonged COVID-19 pandemic.

Accordingly, the purchase period for corporate bonds and CP by the SPV, which was launched last July after discussions at the 4th Emergency Economic Central Countermeasures Headquarters, was originally set to expire on the 13th of next month but will now be extended until the end of the year to continue serving as a safety net for the corporate bond and CP market.

However, the Bank of Korea's loan execution deadline to the SPV will not be extended. The plan is to monitor market conditions and resume additional loans to the SPV if necessary. This decision is based on the relatively stable trend in the corporate bond and CP market compared to when the SPV was established, and the assessment that the SPV's purchasing capacity will be sufficient until the end of the year.

A KDB Industrial Bank official stated, "We will continue policy coordination among the government, the Bank of Korea, and KDB Industrial Bank, and closely monitor market conditions to ensure financial market stability through linked support among financial market stabilization measures."

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