Shinbo Provides P-CBO 510 Billion Won to COVID-19 Affected Companies... "5.2 Trillion Won Support Over 1 Year"

2021 P-CBO Support Status by Company Size. Photo by Korea Credit Guarantee Fund

[Asia Economy Reporter Song Seung-seop]The Korea Credit Guarantee Fund will provide 510 billion KRW in funding to support financing for companies affected by COVID-19.

According to the Credit Guarantee Fund on the 29th, the financing will be conducted through the issuance of Primary Collateralized Bond Obligations (P-CBO). P-CBO is a guarantee method that helps companies raise long-term funds in the financial market by issuing securitized bonds backed by corporate bonds issued by individual companies as underlying assets. This month is the last month for P-CBO issuance this year.

The total amount supported by the Credit Guarantee Fund through P-CBO issuance this year is 5.2 trillion KRW. Of this, 4.4 trillion KRW is new funding, and 800 billion KRW is refinancing. A total of 1,937 companies benefited, including 1,766 small and medium-sized enterprises (SMEs) and 171 large and medium-sized enterprises.

The Credit Guarantee Fund has continuously improved the system this year, such as lowering the subordinated bond acquisition ratio. This is to provide effective financial support for companies affected by COVID-19. The sales limit for promising growth companies has been raised, and the inclusion limit and affiliate limit for companies have also been increased.

Meanwhile, since companies are still experiencing ongoing damage, P-CBO guarantees are expected to continue at a similar level next year as this year.

A Credit Guarantee Fund official stated, “Although With-Corona has begun, companies are still feeling difficulties caused by COVID-19 due to rising overseas raw material prices and logistics costs,” and emphasized, “Next year, we will continue issuance according to the economic situation and companies’ funding needs to maintain the role of a safety net for the national economy.”

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