Korea Capital Raises 310 Billion KRW via ABS Issuance and Syndicated Loan... "Proactive Liquidity Secured"

[Asia Economy Reporter Jang Hyowon] Specialized credit finance company Korea Capital has reduced its reliance on the frozen corporate bond issuance market and secured liquidity through various financing methods.

Korea Capital announced on the 29th that a board resolution to raise a total of 310 billion KRW through asset-backed securities (ABS) issuance and syndicated loan borrowing has been approved.

With the recent sharp increase in the benchmark interest rate causing a tightening in the corporate bond financing market and making public bond issuance difficult, proactive measures were taken. According to a Korea Capital official, this decision aims to improve operating funds and the funding structure in the second half of the year.

The ABS issued by Korea Capital is based on leases, loans, and installment receivables, totaling 110 billion KRW. The maturity is up to 2 years and 3 months, and the interest rate is around 5% on average, with issuance planned for September.

They also decided to expand syndicated loan borrowing targeting foreign banks. A syndicated loan is a medium- to long-term loan provided by a consortium of multiple banks under common terms. Korea Capital, rated A-grade credit, successfully borrowed 112.5 billion KRW through a syndicated loan for the first time in October 2020.

This time, the amount increased by 87.5 billion KRW to a total of 200 billion KRW, higher than the previous borrowing. The maturity is 2 years, and the interest rate is the 3-month CD rate plus 1.65%, with borrowing planned in two installments between September and October.

An official from the company stated, “In the case of syndicated loans, there is the advantage of possible extension at maturity, securing stable cash flow, and diversification of borrowing sources is also continuing.”

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