11 Securities Firms Hold Legoland ABCP... Gangwon-do "Full Repayment"

[Asia Economy Reporter Ji Yeon-jin] It has been identified that 10 domestic securities firms and 1 asset management company hold the asset-backed commercial paper (ABCP) of the Legoland real estate project financing (PF), which has defaulted.

According to data submitted by the Financial Supervisory Service to Rep. Yang Jeong-suk of the National Assembly's Political Affairs Committee on the 19th, 10 securities firms including Shinhan Investment Corp., IBK Investment & Securities, Daishin Securities, Mirae Asset Securities, Samsung Securities, and Multi-Asset Asset Management have incorporated 205 billion KRW of Legoland ABCP. The securities firms divided 195 billion KRW among customer accounts such as trust and consignment accounts.

The amounts are as follows: Shinhan Investment Corp. (55 billion KRW), IBK Investment & Securities (25 billion KRW), Daishin Securities, Mirae Asset Securities, Samsung Securities (20 billion KRW each), NH Investment & Securities, Korea Investment & Securities, DB Investment & Securities (15 billion KRW each), Yuanta Securities, KB Securities (5 billion KRW each).

All these securities firms are understood to have incorporated the ABCP into corporate investor accounts. Multi-Asset Asset Management also incorporated 10 billion KRW into a fund targeting corporate investors.

Previously, the special purpose company (SPC) 'I-One First' established by Gangwon Jungdo Development Corporation (GJC), which promoted the Legoland theme park infrastructure project, was declared bankrupt to raise necessary funds.

Gangwon Province holds a 44% stake as the largest shareholder of GJC. During the tenure of former Governor Choi Moon-soon, Gangwon Jungdo Development Corporation (GJC), which was responsible for the Legoland theme park infrastructure construction in Chuncheon Jungdo, provided credit enhancement when conducting a 205 billion KRW scale PF. Thanks to this, the SPC I-One First, established for the PF, received the highest corporate paper rating of ‘A1’ and issued ABCP backed by loans as underlying assets.

However, when GJC failed to repay on the ABCP maturity date of September 29, Gangwon Province made the extreme decision to file for rehabilitation of GJC in court instead of fulfilling the debt assumption, resulting in the final bankruptcy of I-One First.

Because it is extremely rare for a local government to go bankrupt, lenders trusted the local government guarantee and assigned high credit ratings, but the case where Gangwon Province did not fulfill payment caused the bond market to freeze sharply.

In response, Gangwon Province formed a Legoland PF ABCP response task force (TF) and after several discussions on countermeasures, it is reported that they decided to allocate a budget and fully repay the amount.

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