Eokwon Lee: "80 Trillion Won Support for Companies Affected by Middle East Crisis"... Lowering Corporate Funding Rates with Direct P-CBO Issuance

by Kwon Haeyoung

Published 17 Apr.2026 14:00(KST)

Financial Services Commission Holds Meeting with Steel Industry

The government will provide a total of 80 trillion won in new funds by combining policy finance and private finance to support companies affected by the Middle East crisis. In addition, the Korea Credit Guarantee Fund plans to directly issue primary collateralized bond obligations (P-CBOs) to lower companies' financing costs by 50 basis points (1bp=0.01 percentage point).

Eokwon Lee, Chairman of the Financial Services Commission, is delivering a keynote speech at the 5th Productive Finance Grand Transition Meeting held on April 16 at the Bankers Hall in Jung-gu, Seoul. 2026.4.16 Photo by Jinhyung Kang

On April 17, Eokwon Lee, Chairman of the Financial Services Commission, held an “Industry-Financial Sector Meeting for Industries Impacted by the Middle East Situation” with steel and related industries, stating, “With the Middle East war unresolved, uncertainty continues to surround our economy,” and announced these support measures.

Chairman Lee said, “The steel industry is facing increased costs such as logistics expenses due to the Middle East crisis, concerns about supply disruptions resulting from supply chain instability, and additional pressure from tariff policies in the United States and the European Union (EU), all of which are compounding the burden on the industry.” He added, “We will closely monitor these impacts and respond proactively.”

To begin with, the government is operating a preferential lending program totaling 80 trillion won for affected companies by combining policy finance and private finance. Through a supplementary budget, policy finance support will be expanded to 25.6 trillion won, while the five major financial holding groups and other private financial institutions have prepared their own support measures totaling “53 trillion won plus alpha” to help ease liquidity challenges for companies. The government will continue to monitor the scale and progress of support by industry, and will expand the amount and scope of support as needed.

Starting in June, the Korea Credit Guarantee Fund will directly issue P-CBOs. This is expected to reduce bank and securities firm fees and lower companies' funding costs by about 50 basis points (1bp=0.01 percentage point).

Previously, the Financial Services Commission decided that for small and medium-sized enterprises (SMEs) and mid-sized companies affected by the Middle East crisis, if they refinance P-CBOs within one year, the repayment ratio will be lowered from the previous minimum of 10% to 5%. The ratio for subordinated purchases and the additional interest rate will also be reduced by up to 0.2 percentage points and 0.13 percentage points, respectively. Of the outstanding P-CBOs with these conditions, totaling 900 billion won, approximately 370 billion won is estimated to be related to the steel industry, so related companies are expected to benefit significantly.

In addition, through market stabilization measures such as the Bond Market Stabilization Fund and programs for purchasing corporate bonds and commercial paper (CP), the government will provide broad support from high-grade to lower-grade bonds, thereby easing the burden of bond issuance for companies and minimizing funding gaps.

In addition, through the 6th Corporate Restructuring Fund, totaling 1 trillion won and launching this month, the government will actively support business restructuring and financial structure improvement in the steel industry as well as five other key industries: petrochemicals, semiconductors, automobiles, displays, and secondary batteries.

An official from the Financial Services Commission stated, “We will continue to collect diverse opinions from the financial sector and industry sites to formulate more effective policies.”