January Corporate Fundraising Up 28.5%... Large-Scale IPOs Boost Corporate Bond Issuance Increase

Last month, supported by large-scale initial public offerings (IPOs) and an increase in corporate bond issuance, domestic companies' fundraising also showed double-digit growth.

According to the 'Direct Corporate Financing Performance in January' announced by the Financial Supervisory Service on the 25th, the public issuance amount of stocks and corporate bonds reached 24.0299 trillion KRW, a 28.5% increase compared to the previous month.

In the case of stocks (739.4 billion KRW), capital raising through IPOs significantly increased, resulting in a 52% surge in issuance volume compared to the previous month. Corporate bonds (23.2905 trillion KRW) expanded by 27.9%, mainly in general corporate bonds, as expectations for a base interest rate cut and the start of institutional fund execution at the beginning of the year took effect.

Specifically, the stock issuance volume in January recorded 11 cases totaling 739.4 billion KRW. Among these, IPOs accounted for 9 cases, 728.9 billion KRW. Although the number of cases decreased compared to the previous month, the amount increased by more than 265%. This is analyzed as the effect of large-scale IPOs aimed at KOSPI listing, including LG CNS. However, rights offerings were limited to 2 cases, 10.5 billion KRW, significantly down from 9 cases, 286.8 billion KRW in the previous month. The Financial Supervisory Service explained, "There was no large-scale rights offering, with one KOSDAQ listing and one unlisted company."

In the case of corporate bonds, general corporate bonds increased by 439% to 8.401 trillion KRW across 62 cases compared to the previous month. Typically, the maturity of corporate bonds issued at the beginning of each year also tends to concentrate early in the year, so issuance for debt repayment purposes significantly increased. Due to the beginning-of-year effect, demand for A-grade and BBB-grade or lower corporate bonds also rose sharply.

Financial bonds amounted to 13.825 trillion KRW (219 cases), a 12.4% decrease from the previous month. Specifically, issuance of financial holding company bonds (9 cases, 1.355 trillion KRW) increased by 73.7%, while bank bonds (15 cases, 2.29 trillion KRW) and other financial bonds (195 cases, 10.18 trillion KRW) decreased by 44.7% and 6.3%, respectively. Credit card companies, installment finance companies, and other financial companies saw a decline compared to the previous month, while securities companies increased.

Asset-backed securities (ABS) totaled 1.0645 trillion KRW (29 cases), with the number of cases decreasing but the amount increasing by 21.9% compared to the previous month. As of the end of January, the total outstanding corporate bond balance was 697.2259 trillion KRW, up 0.6% from the previous month. General corporate bonds maintained a net issuance trend following the previous month.

The issuance amount of commercial paper (CP) and short-term bonds in January totaled 127.2318 trillion KRW, a 3.4% increase from the previous month. CP issuance reached 43.993 trillion KRW, up 44.3%, while short-term bonds decreased by 10.1% to 83.2388 trillion KRW. As of the end of January, the CP balance was 213.7241 trillion KRW, and the short-term bond balance was 70.7 trillion KRW, representing increases of 5.3% and 8.9%, respectively, compared to the end of the previous month.

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