Shin Yong Bo Jeung Gi Geum Provides 1 Trillion Won Support for COVID-19 Affected Companies

[Asia Economy Reporter Song Seung-seop] The Korea Credit Guarantee Fund announced on the 27th that it will issue asset-backed company guarantees (P-CBO) worth 1 trillion won to facilitate smooth financing for companies affected by COVID-19.

This issuance is the largest scale in the first half of the year. Through this, the Credit Guarantee Fund will support a total of 362 companies, including 4 large corporations, 36 mid-sized companies, and 322 small and medium enterprises. Of the 1 trillion won, 760 billion won is for new fund supply, and 240 billion won will be used to refinance existing corporate bonds.

The Credit Guarantee Fund's P-CBO guarantee is a system that issues asset-backed securities based on corporate bonds issued by individual companies, enabling companies to raise long-term funds directly in the financial market. For small and medium enterprises, the internal evaluation grade must be K9 or higher (K10 for companies with CPA audit reports), and for large and mid-sized companies, the corporate bond rating must be BB- or higher.

Some of the new funds will be raised through overseas issuance. This is the first overseas issuance since the establishment of the Credit Guarantee Fund and will be issued as a 3-year maturity ESG bond worth 300 million dollars.

A Credit Guarantee Fund official said, "We will timely support the necessary funds through the largest P-CBO issuance in the first half of the year for companies struggling due to COVID-19 and the Ukraine crisis," adding, "We plan to continue bold and innovative policies to accommodate the funding needs of companies as much as possible."