Korea Credit Guarantee Fund Provides 920 Billion Won in Funding Support for Corporate Bond Issuance in September

Helping to alleviate corporate financial difficulties with large-scale funding support before Chuseok
From October issuance, increasing limits by company and affiliate and lowering procurement costs expected

[Asia Economy Reporter Park Sun-mi] The Korea Credit Guarantee Fund (KODIT) announced on the 28th that it has provided long-term funds amounting to 920 billion KRW through the P-CBO (Pooled Collateralized Bond Obligation) guarantee for companies affected by COVID-19 and key industries.

It supported 720 billion KRW in new funds targeting industries directly impacted by COVID-19, such as movie theaters, the automobile industry, and industrial machinery rental businesses, as well as key industries. Additionally, it supplied 200 billion KRW in refinancing funds to companies facing corporate bond maturities.

KODIT’s Pooled Collateralized Bond Obligation guarantee is a system that supports companies in raising long-term funds directly from the financial market by issuing securitized bonds based on corporate bonds issued by individual companies. For large and medium-sized enterprises, it targets corporate bonds with a BB- rating or higher.

Meanwhile, KODIT is actively reflecting the opinions of companies affected by COVID-19 and is in the process of improving the ‘COVID-19 Response P-CBO’ system.

Through this, the per-company limit will be increased from the current maximum of 100 billion KRW to 150 billion KRW for large enterprises, and from 70 billion KRW to 105 billion KRW for medium-sized enterprises. The group limit for large enterprises will also be expanded from the current 150 billion KRW to 250 billion KRW.

Furthermore, in response to changes in market conditions, the subordinated acquisition ratio for large enterprises will be lowered from a minimum of 1% to 0.5%, reducing the financial burden on companies. The revised system will be applied starting from bond issuances in October.

A KODIT official stated, “By reflecting the opinions of companies, broader support for corporate bond issuance will be possible from October,” adding, “We will continue to listen to companies’ voices and strive to improve the system so that companies can overcome the COVID-19 crisis, serving as a reliable pillar.”