Slight Rise in Corporate Direct Financing Last Year...Driven by Surge in Rights Offerings

Last year, the amount of funds raised by domestic companies through the issuance of stocks and corporate bonds increased slightly. Although corporate bond issuance decreased, mainly due to a decline in financial bonds, the overall volume of stock issuance expanded, driven by rights offerings.

According to the “2025 Direct Financing by Corporations” statistics compiled by the Financial Supervisory Service on the 4th, the total amount of public offerings of stocks and corporate bonds last year was 289.9576 trillion won, up 1.0% (2.8938 trillion won) from a year earlier.

The increase in stock issuance outweighed the decrease in corporate bond issuance, resulting in an overall rise in total public offering volume. Stock issuance last year amounted to 13.7065 trillion won, an increase of 4.8860 trillion won (55.4%) year-on-year, while corporate bond issuance came to 276 trillion won, down 1.9923 trillion won (0.7%).

Stock issuance rose sharply, led by large-scale rights offerings by major corporations such as Hanwha Aerospace and Samsung SDI. The total amount of rights offerings last year was 10.0302 trillion won across 72 cases, a surge of 5.3268 trillion won (113.3%) from the previous year. By company size, large corporations saw their rights offerings increase by 5.7943 trillion won (219.7%), whereas small and medium-sized enterprises (SMEs) experienced a decrease of 467.5 billion won (22.6%).

In contrast, stock issuance through initial public offerings (IPOs) fell. IPO proceeds totaled 3.6763 trillion won across 98 deals, down 440.8 billion won (10.7%) year-on-year. For IPOs, the KOSDAQ market recorded 2.3764 trillion won, a decrease of 339.8 billion won (15.9%), while the KOSPI market posted 1.2999 trillion won, an increase of 9.0 billion won (0.7%).

Overall corporate bond issuance declined as an increase in straight corporate bonds and asset-backed securities (ABS) was more than offset by a decrease in financial bonds. The total outstanding balance of corporate bonds stood at 756.8760 trillion won.

Straight corporate bonds and ABS amounted to 53.1260 trillion won (534 issues) and 19.4447 trillion won (52 issues), respectively, up 3.2349 trillion won (6.5%) and 3.2361 trillion won (20.0%) from the previous year. For straight corporate bonds, the share of issuance for refinancing purposes increased (from 74.6% to 79.6%), while the shares for facility investment (from 8.2% to 4.0%) and operating expenses (from 17.2% to 16.4%) declined. To facilitate funding for mid-sized and small companies, the number of issues of primary collateralized bond obligations (P-CBOs) — ABS whose credit is enhanced by institutions such as the Korea Credit Guarantee Fund — decreased from 95 to 89, but the issuance amount rose from 4.5938 trillion won to 5.1602 trillion won.

By contrast, the issuance of financial bonds last year fell. The total issuance of financial bonds was 203.6803 trillion won across 2,698 issues, down 8.4633 trillion won (4.0%) from the previous year, a decline larger than the combined increase in straight corporate bonds and ABS. During the same period, financial holding company bonds increased by 3.8860 trillion won, but bank bonds and other financial bonds decreased by 9.3656 trillion won and 2.9837 trillion won, respectively.

Meanwhile, the issuance of commercial paper (CP) and short-term bonds last year totaled 1,663.3243 trillion won, an increase of 359.7993 trillion won (27.6%) from the previous year. CP issuance rose by 67.9958 trillion won to 503.1909 trillion won, and short-term bond issuance increased by 291.8034 trillion won to 1,160.1333 trillion won. As of last year, the outstanding balances of CP and short-term bonds were 227.8512 trillion won and 84.4943 trillion won, respectively.

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