Corporate financing in S. Korea jumps on rising bond sales

Corporate financing in South Korea jumped last month as companies increase sales of bonds amid low borrowing costs, financial watchdog data showed Tuesday.

Direct corporate financing, including sales of bonds and stocks, surged 19.3 percent from a month earlier to 12.14 trillion won (10.3 billion U.S. dollars) in November, according to the Financial Supervisory Service (FSS).

The surge came as companies raised more funds through bond issuance amid low borrowing costs. The Bank of Korea (BOK) has kept its benchmark interest rate at an all-time low of 1.5 percent after lowering it to that level in June.

Issuance of corporate bonds, including bonds sold by industrial companies, banks, financial institutions and asset-backed securities, expanded 9.6 percent from 9.58 trillion in October to 10.5 trillion won in November.

Bonds, floated by industrial companies, amounted to 3.92 trillion won in November, all of which were unsecured bonds sold by large corporations.

Stock issuance in November was 1.64 trillion won, jumping from 598 billion won in October. Initial public offering (IPO) came in at 553 billion won, and rights offering reached 1.09 trillion won. Endit