February Corporate Direct Financing Fundraising: Stocks and Corporate Bonds Up... CP and Short-Term Bonds Down

Last month, in direct financing fund procurement by domestic companies, stock and corporate bond issuance increased while commercial paper (CP) and short-term bond issuance decreased. The Financial Supervisory Service announced on the 28th through the 'Direct Financing Performance of Companies in February' report that the total issuance of stocks and corporate bonds last month amounted to KRW 20.2508 trillion, an increase of KRW 1.8704 trillion, or 10.2%, compared to the previous month. In February, the scale of stock issuance was 11 cases, amounting to KRW 238.1 billion, which is an 84% decrease compared to the previous month. The impact of initial public offerings (IPO) was significant, with 11 cases and KRW 238.1 billion, representing increases of 5 cases and 72.5% respectively compared to the previous month. However, there were no rights offerings in February, resulting in a 100% decrease compared to the previous month.

In February, a total of KRW 20.0127 trillion in corporate bonds was issued, an 18.5% increase from the previous month. General corporate bonds amounted to 74 cases and KRW 8.424 trillion, up 37.4% from 51 cases and KRW 6.1289 trillion in the previous month. In particular, companies raised funds for refinancing and facility purposes, while the proportion of funds raised for operating capital decreased. Most issuances were high-quality bonds rated AA or higher, centered on medium-term bonds.

Financial bonds totaled KRW 10.6317 trillion, a 0.7% increase from the previous month. Financial holding company bonds and bank bonds amounted to KRW 1.8 trillion and KRW 3.3667 trillion respectively, increasing by 16.1% and 51.6% compared to the previous month, but other financial bonds decreased by 19.5% to KRW 5.465 trillion. Asset-backed securities (ABS) increased by 371.4% to KRW 957 billion compared to the previous month.

As of the end of February, the total outstanding balance of corporate bonds was KRW 627.5913 trillion, a slight increase of 0.3% from the previous month. General corporate bonds continued net issuance. In February, the issuance of CP and short-term bonds totaled KRW 94.11 trillion, a 5.1% decrease compared to the previous month. In particular, CP issuance amounted to KRW 29.4151 trillion, down 13.6% from the previous month. Accordingly, as of the end of February, the outstanding balance of CP was KRW 213.1398 trillion, a 2.3% decrease from the previous month.

Last month, short-term bond issuance totaled KRW 64.6949 trillion, a 0.6% decrease compared to the previous month. PF-AB short-term bonds amounted to KRW 14.2183 trillion, down 9.5% from the previous month. General short-term bonds and other AB short-term bonds were KRW 41.1289 trillion and KRW 9.3477 trillion respectively, increasing by 2.2% and 2.6% compared to the previous month. As of the end of February, the outstanding balance of short-term bonds was KRW 68.3405 trillion, a 7.3% decrease from the previous month.