July Corporate Stock Issuance Up 73% MoM... Corporate Bonds Down 12%

[Asia Economy Reporter Park Jihwan] Last month, in direct financing fund raising by domestic companies, stock issuance increased while corporate bond issuance decreased.

The Financial Supervisory Service announced on the 24th, through the 'July 2021 Corporate Direct Financing Performance' data, that the total issuance of stocks and corporate bonds in July was 21.0214 trillion KRW, down 657.6 billion KRW compared to the previous month.

Stock issuance amounted to 4.0554 trillion KRW, an increase of 1.7151 trillion KRW (73.3%) compared to 2.3403 trillion KRW in the previous month. Large KOSPI initial public offerings (IPOs) such as KakaoBank (2.5526 trillion KRW) and SD Biosensor (517.6 billion KRW) significantly expanded the issuance scale.

Paid-in capital increase was 847.1 billion KRW, down 61.9% from the previous month when large-scale fundraising by listed companies was active. In the previous month, Hanwha Systems (1.1167 trillion KRW) and HYBE (445.6 billion KRW) raised funds through paid-in capital increases.

Last month, the scale of corporate bond issuance was 16.966 trillion KRW, down 2.3727 trillion KRW (12.3%) from the previous month. The Financial Supervisory Service explained that although general corporate bonds increased mainly in non-investment grade bonds, the issuance scale shrank due to decreases in financial bonds and asset-backed securities (ABS).

General corporate bond issuance was 4.823 trillion KRW, up 8.4% from the previous month. Issuance of medium- to long-term bonds for debt repayment purposes continued. The proportions of refinancing and operating funds decreased, while facility funds expanded. Financial bonds amounted to 11.405 trillion KRW, down 12.6% from the previous month. Financial holding company bonds were issued at 787 billion KRW, increasing 96.8% from the previous month. Bank bonds were 3.76 trillion KRW, down 15.6% from the previous month. Credit card companies and installment finance companies saw issuance scales decrease by 31.2% and 14.6%, respectively. Securities companies expanded issuance by 54.3%. ABS issuance was 738 billion KRW, down 60.0% from the previous month.

Short-term fund issuance performance slightly decreased compared to the previous month. Last month, corporate commercial paper (CP) issuance was 32.6944 trillion KRW, down 1.2% from the previous month. Short-term bonds issuance was 104.2006 trillion KRW, down 8.5% from the previous month.