S.Korea's corporate bond sale grows in January on record-low borrowing cost

Source: Xinhua | 2020-02-26

Corporate bond issuance in South Korea posted a double-digit growth in January amid the record-low borrowing cost, financial watchdog data showed Tuesday.

Bonds, sold by industrial companies and financial institutions, as well as asset-backed securities (ABS) reached 11.2 trillion won (9.2 billion U.S. dollars) in January, up 27.7 percent from the previous month, according to the Financial Supervisory Service.

Bond issuance by industrial companies more than quintupled to 3.2 trillion won (2.6 billion U.S. dollars) last month as the firms issued mid- and long-term bonds for the purpose of debt refinancing and business operation.

The rapid increase came as the country's central bank slashed its benchmark interest rate to a record low of 1.25 percent in October last year. The policy rate was cut from 1.75 percent to 1.50 percent last July.

The equity financing, including initial public offering (IPO) and rights issuance, amounted to 47.7 billion won (39.3 million U.S. dollars) in January, down 93.4 percent from the previous month.