Corporate bond sales in S. Korea post double-digit decline in H1

Corporate bond sales in South Korea posted a double-digit decline in the first half of this year as investors refrained from purchasing high-risk bonds, financial watchdog data showed on Thursday.

Bonds issued by general companies amounted to 18.9 trillion won (16.8 billion U.S. dollars) during the January-June period, down 18.9 percent from 23.32 trillion won a year earlier, according to the Financial Supervisory Service (FSS).

The reduction came as investors rushed to high-rated bonds. Unsecured corporate bonds with a credit rating of AA or higher accounted for about 81 percent of the total issuance in the first half.

Combined bond sales, including asset-backed securities (ABS) and bonds floated by banks and financial institutions, reached 57.39 trillion won in the first half, down 9.6 percent from a year ago.

As of end of June, outstanding corporate bond sales reached 408.65 trillion won, up 2.2 percent from a year ago.

Sales of commercial paper (CP) and other short-term electronic bonds jumped 9.0 percent over the past year to 680.59 trillion won in the first half as companies depended on short-term debts amid reluctance to buy long-term bonds.

Equity debt financing, including rights offering and initial public offering (IPO), was 3.56 trillion won in the first half, up 59.0 percent from the same period of last year. Endit