November Corporate Bond Issuance Volume Increases by 15%... General Corporate Bonds Down 60%

Corporate bonds increased, but general corporate bonds sharply declined
CP and short-term bonds also rose over 4%

[Asia Economy Reporter Lee Jung-yoon] Although the scale of corporate bond issuance increased by more than 15% last month, general corporate bonds were found to have sharply decreased by nearly 60%.

According to the "Direct Financing Performance of Corporations in November" announced by the Financial Supervisory Service on the 28th, the scale of corporate bond issuance was 9.609 trillion KRW, an increase of 15.8% compared to the previous month.

General corporate bonds amounted to 13 cases, 590 billion KRW, which is a significant decrease compared to 19 cases and 1.387 trillion KRW in the previous month. In particular, the issuance amount plummeted by 57.5%. Regarding the use of funds, there was no refinancing issuance, operating funds decreased by 69.5%, while facility funds increased by 191.3%.

Additionally, only AAA-rated high-quality bonds were issued, and long-term bonds were not issued as in the previous month. The trend of shortening issuance maturities also continued.

Financial bonds were issued in 143 cases, totaling 7.545 trillion KRW. Compared to 70 cases and 6 trillion KRW in the previous month, the issuance scale increased by 25.8%. Issuance increased across credit card companies, installment finance companies, and securities firms.

Asset-backed securities (ABS) were issued in 76 cases, totaling 1.474 trillion KRW, an increase of 61.8% in issuance scale. P-CBOs, which are ABSs issued with credit enhancement by institutions such as the Credit Guarantee Fund to facilitate funding for small and medium-sized enterprises, amounted to 6 cases, 432 billion KRW, down 111.2 billion KRW from 8 cases, 543.2 billion KRW in the previous month.

As of the end of last month, the total outstanding corporate bonds amounted to 624.7127 trillion KRW, a 0.8% decrease from the previous month. The issuance amount of general corporate bonds was less than the redemption amount of 1.7 trillion KRW last month, continuing net redemption.

Commercial paper (CP) and short-term bond issuance totaled 117.7683 trillion KRW, an increase of 4.3% compared to the previous month. CP issuance was 35.1238 trillion KRW, up 12.7%, with general CP and PF-ABCP increasing by 28.6% and 21.2%, respectively. Other ABCP decreased by 12.6%. The outstanding CP balance at the end of last month was 227.2419 trillion KRW, down 2.8%.

Short-term bonds totaled 82.6445 trillion KRW, up 1.1%. General short-term bonds decreased by 0.2%, but PF-AB short-term bonds and other AB short-term bonds increased by 5.0% and 3.2%, respectively. The outstanding short-term bond balance was 74.9961 trillion KRW, up 0.6%.

Stock issuance increased by 25.2% compared to the previous month due to paid-in capital increases by large KOSPI-listed companies such as Jeju Air, although initial public offering (IPO) amounts decreased. Last month, stock issuance amounted to 16 cases, 610.4 billion KRW. IPOs were 13 cases, 274.1 billion KRW, a 31.2% decrease in issuance amount. Paid-in capital increases recorded 3 cases, 336.3 billion KRW, an increase of 277.9% compared to the previous month.

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