Shinbo and CJ CGV Support 1.2 Trillion Won Corporate Bond Issuance for COVID-19 Affected Companies

[Asia Economy Reporter Kwon Haeyoung] The Korea Credit Guarantee Fund (KODIT) announced on the 29th that it has provided long-term funds worth 1.2 trillion KRW through securitization company guarantees to companies affected by the novel coronavirus disease (COVID-19) and key industries.

KODIT's securitization company guarantee is a system that supports companies in raising long-term funds directly in the financial market by issuing securitized securities based on corporate bonds issued by individual companies as underlying assets.

In addition to the initially planned 1.7 trillion KRW for 'Key Industry Securitization Company Guarantees,' KODIT separately introduced 'COVID-19 Damage Response Securitization Company Guarantees' and established a guarantee supply plan of 6.7 trillion KRW, aiming to provide the largest-ever scale of funding through securitization company guarantees within this year.

This year's corporate bond issuance began in March. Due to the time required for companies' accounting settlements and corporate bond rating evaluations, the highest demand was concentrated in this issuance, with new issuance exceeding 900 billion KRW this month. KODIT also supported 260 billion KRW in refinancing funds by reducing the principal repayment burden on matured corporate bonds already issued through securitization company guarantees to 10%, half of the previous level.

In particular, in the May issuance, 500 billion KRW was prioritized to companies directly affected by COVID-19, such as CJ CGV (cinema), Taepyeongyang Moolsan (apparel manufacturing), and E-Land Retail (distribution), significantly contributing to securing liquidity for companies struggling due to the worsening economic situation.

KODIT also supplied 420 billion KRW to government-designated key industries such as automobile, shipbuilding, petrochemicals, and display, as well as material, parts, and equipment companies, focusing on strengthening industrial competitiveness centered on manufacturing.

A KODIT official said, "Support for companies affected by COVID-19 is urgent, but preparation for sustainable growth after overcoming the crisis is also important," adding, "KODIT will actively support growth-oriented companies so that they do not lose competitiveness due to temporary liquidity shortages and will lead the leap forward of our economy."