Net Redemption of Corporate Bonds Continues; Issuance of CP and Short-Term Bonds Increases

The issuance of general corporate bonds fell by nearly 50 percent last month compared to the previous month.

According to the Financial Supervisory Service on Tuesday (June 30), the total value of corporate bond issuance last month stood at 18.7813 trillion won, a 15.4 percent decrease from the 22.2021 trillion won recorded in the previous month.

The issuance of general corporate bonds dropped by 49.2 percent to 2.12 trillion won, with 61.8 percent of the funds raised intended for refinancing.

High-grade bonds with a credit rating of AA or higher accounted for 100 percent of the total, amounting to 2.12 trillion won.

There were no issuances of bonds with ratings of A or BBB and below.

In April, AA-rated bonds accounted for 79.9 percent, A-rated bonds for 16.4 percent, and bonds rated BBB or lower for 3.7 percent.

General corporate bonds saw a net redemption of 422 billion won last month, continuing the trend of net redemption throughout this year.

Some analysts suggest that companies have maintained a wait-and-see approach ahead of schedules such as the annual credit rating reviews in June and the submission of first-quarter business reports.

As of the end of last month, the total outstanding balance of corporate bonds increased by 0.6 percent to 749.3958 trillion won.

The issuance of financial bonds fell by 8.9 percent to 15.1898 trillion won, while the issuance of asset-backed securities (ABS) rose by 8.7 percent to 1.4715 trillion won.

The total issuance of commercial paper (CP) and short-term bonds increased by 14.5 percent to 259.387 trillion won.

CP issuance decreased by 18.7 percent to 45.8292 trillion won, while the issuance of short-term bonds increased by 25.4 percent to 213.5578 trillion won.

The total value of equity issuance reached 1.3596 trillion won, a 228.7 percent increase from the 413.6 billion won recorded in the previous month.

The number of initial public offerings (IPOs) remained the same at four, but the total value decreased by 29.8 percent to 110.7 billion won.

Of the four listings on the KOSDAQ market, one was a special purpose acquisition company (SPAC).

Paid-in capital increases rose by 388.0 percent from the previous month to 1.2489 trillion won.
※ Please note: This article was translated by AI and may contain errors.