Q1 Short-Term Bond Financing Scale 293 Trillion Won...18.8% Increase Year-on-Year

[Asia Economy Reporter Oh Ju-yeon] The scale of fundraising through short-term bonds in the first quarter of this year increased by more than 18% compared to the same period last year. Short-term bonds (STB) are corporate bonds issued by companies that meet certain requirements, such as a maturity of one year or less and issuance of 1 billion KRW or more. The short-term bond system was introduced in 2013 to replace commercial paper and the call market, establish a new infrastructure enabling electronic issuance, distribution, and exercise of rights, and to lay the foundation for the development of the short-term financial market and capital market as well as the introduction of electronic securities.

According to the Korea Securities Depository on the 9th, the total amount of funds raised through short-term bonds in the first quarter of this year was 293.2 trillion KRW, an increase of 46.4 trillion KRW (18.8%) compared to the same period last year (246.8 trillion KRW). Compared to the previous quarter (311 trillion KRW), it decreased by 17.8 trillion KRW (5.7%).

The issuance volume of general short-term bonds was 243.5 trillion KRW, up 40.1 trillion KRW (19.7%) from the same period last year, and the issuance volume of securitized short-term bonds was 49.7 trillion KRW, an increase of 6.3 trillion KRW (14.5%) compared to the same period last year.

Among these, the issuance volume of foreign currency-denominated short-term bonds was 439 million USD, up 46.4% from the same period last year and down 2.9% from the previous quarter.

By maturity, bonds issued within 3 months accounted for 291.9 trillion KRW, representing 99.6% of the total issuance volume. This appears to be mainly due to the current exemption benefit from submitting securities registration statements.

In particular, ultra-short-term bonds with maturities within 7 days increased by 14.9% compared to the same period last year and decreased by 9.3% compared to the previous quarter, with issuance amounting to 181.2 trillion KRW, accounting for 61.8% of the total issuance volume.

Bonds with maturities between 8 days and 3 months amounted to 110.7 trillion KRW, accounting for 37.8% of the total issuance volume.

By credit rating, issuance volume of A1 rated bonds was 266.4 trillion KRW, up 20.6% compared to the same period last year, followed by A2 (21.7 trillion KRW) and A3 (4.2 trillion KRW).

The Depository explained, "Issuance of A1 rated bonds accounts for the majority of total issuance volume (90.9%), indicating that there is no significant change in preference for safe asset investment."

By industry, securities companies (173 trillion KRW), securitization companies (45 trillion KRW), card, capital, and other financial businesses (41 trillion KRW), and general companies and public enterprises (30 trillion KRW) had the largest issuance volumes in that order.

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