Shinbo Issues P-CBO to Provide 820 Billion KRW Support to COVID-19 Affected Companies

60% Increase Compared to Previous Month

[Asia Economy Reporter Minwoo Lee] The Korea Credit Guarantee Fund (KODIT) will issue guarantees worth 820 billion KRW to support companies affected by COVID-19 and others.

KODIT announced on the 30th that it will issue such Primary Collateralized Bond Obligations (P-CBO) this month. Through this, it will support a total of approximately 820 billion KRW, including 710 billion KRW in new funds, targeting 2 large corporations, 32 mid-sized companies, and 203 small and medium-sized enterprises (SMEs). This represents a 60% increase compared to the same month last year. This is interpreted as a result of increased demand from companies aiming to secure funds proactively in preparation for interest rate hikes amid ongoing uncertainties in the capital market.

P-CBO guarantees are a system that supports companies in raising long-term funds directly from the financial market by issuing securitized bonds based on corporate bonds issued by individual companies as underlying assets.

Applications for issuance in May are currently being accepted. SMEs in need of funds can apply at nearby branches, while large and mid-sized companies can apply through the Securitization Guarantee Center. The support targets are companies with an internal KODIT evaluation grade of K9 or higher for SMEs (K10 for companies with CPA audit reports), and companies with corporate bond ratings of BB- or higher for large and mid-sized companies.

A KODIT official stated, "Many companies are experiencing liquidity risks amid difficult economic conditions such as the prolonged COVID-19 pandemic and the Ukraine crisis," adding, "We will fully perform our role as a policy financial institution by providing necessary funds to overcome management crises as much as possible."

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