Yoon Hee-sook: "Kim Jin-tae Seems to Misunderstand Bond Market... Should Have Shown Willingness to Repay Debt"

Economist and Former People Power Party Lawmaker Yoon Hee-sook Indirectly Criticizes Gangwon Governor Kim Jin-tae
Kim Jin-tae Expresses Regret, Promises to Raise Funds and Repay by December 15

Governor Kim Jin-tae of Gangwon Province is answering questions from reporters after returning through Incheon International Airport Terminal 1 on the afternoon of the 27th. Photo by Yonhap News

[Asia Economy Reporter Yoon Seul-gi] Amid the ongoing credit market tightening triggered by the LegoLand-related debt guarantee default, economist and former People Power Party lawmaker Yoon Hee-sook criticized Gangwon Province Governor Kim Jin-tae for "not recognizing the sensitivity of the market."

On the 28th, Yoon appeared on KBS Radio's "Choi Kyung-young's Strongest Current Affairs" and said, "I think there was a lack of understanding about how interconnected the bond market is," adding, "It seems they thought this was just a problem within Gangwon Province."

The so-called LegoLand incident arose when Gangwon Province announced its intention to withdraw the payment guarantee for the 205 billion KRW project financing (PF) asset-backed commercial paper (ABCP) issued to develop the LegoLand theme park. This caused market anxiety over the reliability of credit enhancements by local governments, dampening investor sentiment. As companies failed to issue corporate bonds, a 'financial paralysis' spread, making it difficult to raise funds.

Yoon said, "From the securities companies' perspective, simply filing for rehabilitation is understood as a very significant managerial action," and added, "It would have been better if they had shown a determination to repay the debt despite this significant managerial action, but instead, they said it was 'to prevent repaying the 205 billion KRW debt of the Jungdo Development Corporation on their behalf,' which is the opposite."

She continued, "The approach to break away from the previous governor's failures should have been more delicate," and expressed regret, saying, "Not only us but the global financial markets are sensitive, and I feel there was a lack of awareness of the extremely sensitive market situation."

Meanwhile, Governor Kim, facing the fallout from the LegoLand incident spreading beyond financial markets into politics, expressed regret again and emphasized that the guarantee obligation would definitely be fulfilled. Returning earlier than originally scheduled on the 27th, Kim said at Incheon International Airport, "From the beginning, I stated that we would fulfill the guarantee obligation and that there was no need to worry, but an unexpected situation arose during the process of persuading others," and promised, "Although the financial situation is not sufficient, we will somehow secure funds and repay by December 15."

Regarding the government's decision to supply over 50 trillion KRW to ease the credit market tightening caused by the LegoLand incident, he said, "I feel somewhat sorry. Regardless, even though this was never our intention, I feel sorry that the situation has unfolded this way."

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