Derivative-linked securities (DLS) issuance has continued to decline this year. This marks the third consecutive quarter of double-digit decreases compared to the previous quarter.
According to the Korea Securities Depository on the 20th, as of the end of September, the number of DLS issuance items in the third quarter was 484, representing an 8.3% increase compared to the same period last year but a 3.8% decrease from the previous quarter. The issuance amount was 3.2423 trillion KRW, down 4.4% year-on-year and 21.5% quarter-on-quarter. The issuance amount fell by 41.1% quarter-on-quarter in the first quarter of this year, followed by a 20.8% decrease in the second quarter.
By issuance type, public offerings accounted for 54.1% (1.7552 trillion KRW) and private placements 45.9% (1.4871 trillion KRW) of the total issuance amount. The public offering issuance amount increased by 28.9% year-on-year but decreased by 25.5% quarter-on-quarter, while the private placement issuance amount decreased by 26.8% year-on-year and 16.3% quarter-on-quarter.
By underlying asset type, interest rate-linked DLS accounted for 76.7% of the total issuance amount at 2.4861 trillion KRW, and credit-linked DLS accounted for 16.2% at 524.3 billion KRW, together making up 92.9% of the total issuance amount of 3.0104 trillion KRW.
A total of 20 companies issued DLS, with Hana Securities issuing the most at 1.1957 trillion KRW, followed by Samsung Securities and BNK Investment & Securities, issuing 359.1 billion KRW and 303.3 billion KRW respectively. The top five securities firms’ DLS issuance amounted to 2.3709 trillion KRW, accounting for 73.1% of the total issuance amount.
The outstanding balance of unredeemed DLS issuance was 31.694 trillion KRW, showing a 0.3% increase year-on-year but a 0.04% decrease quarter-on-quarter.
The total DLS redemption amount in the third quarter was 3.5402 trillion KRW, up 47.0% year-on-year but down 31.1% quarter-on-quarter. By redemption type, maturity redemptions amounted to 2.8236 trillion KRW, accounting for 79.7% of total redemptions, while early redemptions and mid-term redemptions were 594.1 billion KRW and 122.5 billion KRW respectively, representing 16.8% and 3.5% of total redemptions.
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