October Financial Bonds and ABS Issuance Plummets 55%... General Corporate Bonds Rise 22%

[Asia Economy Reporter Lee Jung-yoon] The issuance volume of financial bonds and asset-backed securities (ABS) significantly decreased last month.

According to the corporate direct financing performance for October announced by the Financial Supervisory Service on the 24th, the issuance volume of corporate bonds was 8.2982 trillion KRW, down 49.5% compared to the previous month.

General corporate bonds amounted to 1.387 trillion KRW across 19 cases, increasing by 21.7% from the previous month. Issuances were centered on high-quality bonds rated AA or higher, and with no long-term bonds issued following the previous month, the maturity period tended to shorten.

Financial bonds totaled 6 trillion KRW across 70 cases, decreasing by 54.7%. ABS issuance sharply dropped by 55.9% to 911.2 billion KRW across 31 cases. P-CBOs, which are ABS issued with credit enhancement from institutions such as the Credit Guarantee Fund to facilitate funding for small and medium enterprises, amounted to 543.2 billion KRW across 8 cases, down by 194.3 billion KRW.

At the end of last month, the total outstanding corporate bonds stood at 629.8888 trillion KRW, down 2.1% from the previous month. The issuance amount of general corporate bonds was less than the October redemption amount of 4.8 trillion KRW, resulting in continued net redemption.

Commercial paper (CP) and short-term bond issuance totaled 112.9208 trillion KRW, decreasing by 8.8% compared to the previous month.

CP issuance amounted to 31.1754 trillion KRW, down 27.3%. General CP increased by 5.5% to 17.3195 trillion KRW, but other asset-backed commercial paper (ABCP) recorded 11.675 trillion KRW and real estate project financing (PF)-ABCP was 2.1808 trillion KRW, decreasing by 36.6% and 49.2% respectively from the previous month. As of the end of October, the outstanding CP balance was 233.745 trillion KRW, down 2.0%.

Short-term bond issuance totaled 81.7454 trillion KRW, increasing by 0.9%. General short-term bonds were 57.3357 trillion KRW and PF-AB short-term bonds were 1.4679 trillion KRW, rising by 3.4% and 5.0% respectively. Other AB short-term bonds decreased by 15.0%.

Additionally, stock issuance last month was 4.875 billion KRW across 22 cases, down 36.1% from the previous month.

Initial public offerings (IPO) totaled 3.985 billion KRW across 19 cases, increasing by 6 cases compared to the previous month but with issuance volume decreasing by 31.7%. Paid-in capital increases were 890 billion KRW across 3 cases, sharply declining by 50.4%.