"February Corporate Fundraising 28 Trillion Won... Corporate Bonds Rise on Expectations of Base Rate Cut"

In February, funds raised by domestic companies through issuing stocks and corporate bonds increased by more than 16% compared to the previous month. The rise in corporate bond issuance was influenced by expectations of a base interest rate cut.

According to the 'Direct Financing Performance of Companies in February 2025' released by the Financial Supervisory Service on the 26th, stocks and corporate bonds issued by companies last month amounted to 28.0067 trillion KRW, an increase of 3.9768 trillion KRW (16.5%) compared to the previous month.

The scale of stock issuance was 443.2 billion KRW, a decrease of 296.2 billion KRW (40.1%) from 739.4 billion KRW in the previous month. The absence of large-scale initial public offerings (IPOs) had a significant impact. Paid-in capital increases amounted to 237.8 billion KRW, up 227.3 billion KRW (2174.2%) from the previous month. By number of cases, there were 5 on KOSDAQ and 1 unlisted company.

Corporate bonds totaled 27.5635 trillion KRW, an increase of 4.273 trillion KRW (18.3%) from the previous month. General corporate bonds amounted to 10.77 trillion KRW, up 2.369 trillion KRW (28.2%) from the previous month. Specifically, refinancing purposes increased from 7.3978 trillion KRW in January to 7.7342 trillion KRW this month, and funds for operational purposes rose from 650 billion KRW to 2.8238 trillion KRW.

With the continuation of the beginning-of-year effect, issuance of corporate bonds with credit rating 'A grade' was active. A-grade bonds increased from 1.39 trillion KRW in January to 2.794 trillion KRW last month. Additionally, AA grade and above rose from 6.76 trillion KRW to 7.67 trillion KRW, and BBB grade and above increased from 251 billion KRW to 306 billion KRW.

Financial bonds amounted to 15.8679 trillion KRW, an increase of 2.0429 trillion KRW (14.8%) compared to the previous month. On the other hand, asset-backed securities (ABS) decreased by 13.0% to 925.6 billion KRW.

Commercial paper (CP) and short-term bond issuance totaled 118.1406 trillion KRW, a decrease of 9.0912 trillion KRW (7.1%) from the previous month. CP issuance was 35.6633 trillion KRW, down 8.3297 trillion KRW (18.9%). Short-term bonds also recorded 82.4773 trillion KRW, a decrease of 761.5 billion KRW (0.9%) compared to the previous month.