Corporate bond sales in S.Korea tumble 41.7 pct in March

Corporate bond sales in South Korea posted a double-digit decline in March, indicating a frozen corporate debt-financing market despite record-low interest rates, financial watchdog data showed on Monday.

Bonds issued by industrial companies reached 1.6 trillion won (1.4 billion U.S. dollars) in March, down 41.7 percent from the previous month, according to the Financial Supervisory Service (FSS).

During the January-March period, the corporate bond issuance plunged 34.3 percent to 7.87 trillion won compared with the same period last year.

The sharp fall came amid growing worries about corporate restructuring, especially in shipbuilding and shipping industries, that resulted in the spreading of risk-averse sentiment among bond investors.

The percentage of bonds with a credit rating of "AA" or above accounted for 86.7 percent of the total in March, indicating a strong demand for high-rated bonds. Demand for A-rated bonds especially dropped last month, the FSS said.

Overall bond sales, including those issued by financial companies and banks as well as asset-backed securities (ABS), increased 10.7 percent from a month earlier to 7.06 trillion won in March.

Equity financing, including initial public offering (IPO) and rights offering, amounted to 221.3 billion won in March, down 84.4 percent from the previous month. Enditem