Impact of PF Crisis... 24% Decrease in Short-Term Bond Financing Last Year

Short-Term Corporate Bond Issuance by Securities Firms Plummets 43%

Last year, the scale of fund-raising through short-term bonds decreased by about 24% compared to 2022. This is attributed to a significant reduction in the issuance of short-term bonds by securities companies due to concerns over the spread of the project financing (PF) crisis.

The Korea Securities Depository announced on the 17th that the scale of fund-raising through short-term bonds last year was 855.5 trillion won, a 23.8% decrease compared to the previous year.

Short-term bonds refer to corporate bonds issued with certain conditions, such as a maturity of one year or less and a minimum amount of 100 million won, used for short-term financing.

By type, general short-term bonds were issued worth 582.5 trillion won, down 28% from the previous year. Securitized short-term bonds were issued worth 273 trillion won, down 12.9% from the previous year.

By maturity, bonds with maturities from 8 days to 92 days were issued amounting to 529.1 trillion won, accounting for 61.8% of the total short-term bond issuance. Bonds with maturities of 7 days or less were issued amounting to 323.1 trillion won, accounting for 37.8%. Bonds with maturities from 93 to 365 days were issued amounting to 3.3 trillion won, accounting for 0.4%. Since short-term bonds with maturities within three months do not require the submission of a securities registration statement, the issuance scale of short-term bonds with short maturities appears to be large.

By credit rating, bonds rated A1 were issued amounting to 777.1 trillion won, accounting for 90.8% of the total. Compared to the same period last year, this decreased by 25.1%. Following this, bonds rated A2 were issued worth 69.5 trillion won, A3 rated bonds 8.6 trillion won, and bonds rated B or below 300 billion won.

By industry, securitization companies issued short-term bonds worth 273 trillion won, accounting for 31.9% of the total issuance. Although securitization companies had the largest issuance scale among all industries, it decreased by 12.9% compared to the previous year.

The issuance scale of short-term bonds by securities companies was 250.8 trillion won, down 42.8% from the previous year. General corporations and public enterprises issued 176.5 trillion won, down 5.9%, and card, capital, and other financial industries issued 155.2 trillion won, down 15.5%.