Issuance Scale Increased by 70.1 Billion Won Year-on-Year
445 Billion Won Issued as Green Asset-Backed Securities
"Supporting Fundraising for Green Economic Activities"
The Korea Technology Finance Corporation (KOTEC) announced on June 16 that it had issued new primary collateralized bond obligations (P-CBOs) worth 287.3 billion won in the first half of this year to help technology-based small and medium-sized enterprises (SMEs) raise funds through the direct financing market.
P-CBOs are securitized bonds issued by a special purpose company (SPC), which acquires newly issued corporate bonds from SMEs that have difficulty raising funds on their own credit. The SPC uses these bonds as underlying assets. KOTEC provides guarantees for the obligations borne by the SPC, thereby enhancing credit and supporting technology-based SMEs in securing long-term funds smoothly in the direct financing market.
Through this issuance, a total of 113 technology-based SMEs that have been struggling amid the economic downturn and uncertain economic conditions newly raised 287.3 billion won at a fixed interest rate with a three-year maturity. In addition, by strengthening policy support for proactive funding needs of companies, the scale of new issuances this year increased by 70.1 billion won compared to the same period last year, and the number of supported companies also rose by 16.
In particular, KOTEC issued 44.5 billion won of the total as green asset-backed securities (G-ABS), supporting 18 companies engaged in businesses that meet the criteria of the Korean Green Taxonomy. KOTEC explained that this has facilitated fundraising for green economic activities and contributed to achieving carbon neutrality by promoting green investment.
Green asset-backed securities (G-ABS) are products introduced in cooperation with the Ministry of Environment and the Korea Environmental Industry and Technology Institute to promote the green economy. This year, the interest subsidy support period has been extended to three years, providing up to 3.0 percentage points in the first year and about 50% of the first-year support amount in the second and third years.
KOTEC plans to issue additional P-CBOs and G-ABS in the second half of the year and will provide detailed information on application procedures, conditions, and eligibility through its website in August.
Kim Jongho, Chairman of KOTEC, stated, "As our economy faces significant challenges such as slowing growth and global competition for technological supremacy, KOTEC will take the lead in supporting technology-based SMEs to overcome liquidity crises and secure technological competitiveness."
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