May IPOs Increase by 415%... CP and Short-term Bonds Decline

Financial Supervisory Service Announces May Corporate Direct Financing Performance

Fundraising through stock issuance significantly increased last month. This was due to a rise in the number of initial public offerings (IPOs) and paid-in capital increases by companies. While the issuance of stocks and corporate bonds generally increased, the issuance amounts of commercial paper (CP) and short-term bonds decreased.

The Financial Supervisory Service announced on the 20th, through the 'Direct Financing Performance of Corporations in May' report, that the total issuance of stocks and corporate bonds in May amounted to 22.8076 trillion KRW, an increase of 2.5707 trillion KRW or 12.7% compared to the previous month.

Among these, stock issuance amounted to 274.1 billion KRW, with both IPOs and paid-in capital increases rising, resulting in a 234% increase in issuance size compared to the previous month. IPOs totaled 8 cases, amounting to 229.9 billion KRW, marking a 414.9% increase from the previous month. All were public offerings for the KOSDAQ listing of small and medium-sized enterprises and SPACs. Fundraising through paid-in capital increases involved 2 cases, totaling 44.1 billion KRW.

In May, corporate bonds totaled 22.5335 trillion KRW issued, an 11.8% increase from the previous month. General corporate bonds amounted to 2.296 trillion KRW across 25 cases, a 63.8% decrease compared to 75 cases and 4.039 trillion KRW in the previous month. Notably, companies increased the proportion of refinancing and operating funds, with issuance continuing to focus on medium-term bonds. Medium-term bonds refer to bonds with maturities exceeding 1 year but not exceeding 5 years. By credit rating, issuance centered on high-quality bonds rated AA or higher (85.3%) intensified. The proportion of AAA-rated bonds increased by 2 percentage points to 20%, and AA-rated bonds also rose by 13.4 percentage points to 65.3% compared to the previous month.

Financial bonds totaled 18.986 trillion KRW issued. Among these, financial holding company bonds amounted to 1 trillion KRW, bank bonds to 9.62 trillion KRW, and other financial bonds to 8.366 trillion KRW, increasing by 35.1%, 144.3%, and 13.4% respectively compared to the previous month. Asset-backed securities issuance was 251.5 billion KRW, a 29.2% decrease from the previous month.

As of the end of last month, the total outstanding balance of corporate bonds was 629.258 trillion KRW, a 0.1% decrease from the previous month. Issuance of CP and short-term bonds amounted to 106.4161 trillion KRW, a 4.9% decrease compared to the previous month.

Among these, CP issuance totaled 30.0766 trillion KRW, down 17.5% from the previous month. General CP was 15.2169 trillion KRW, real estate project financing asset-backed commercial paper (PF-ABCP) was 3.1371 trillion KRW, and other ABCP was 11.7227 trillion KRW, decreasing by 24.1%, 2.3%, and 11.2% respectively compared to the previous month. The outstanding balance of CP was 201.375 trillion KRW, down 1.9% from the previous month.

Short-term bond issuance last month totaled 76.3395 trillion KRW, a 1.3% increase from the previous month. Other AB short-term bonds increased to 16.3525 trillion KRW compared to the previous month. General short-term bonds were 50.6749 trillion KRW, and PF-AB short-term bonds were 9.3121 trillion KRW, decreasing by 6.6% and 20.7% respectively compared to the previous month. As of the end of May, the outstanding balance of short-term bonds was 67.6213 trillion KRW, down 1.3% from the previous month.

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