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Corporate bond sales in S.Korea jump ahead of Fed's rate hike

Xinhua, October 27, 2016 Adjust font size:

Corporate bond sales in South Korea posted a double-digit increase last month as companies rushed to debt-financing market on expectations that the U.S. Federal Reserve would raise interest rates later this year, financial watchdog data showed on Thursday.

Corporate financing, which includes stock offering and bond issuance, totaled 9.32 trillion won (8.19 billion U.S. dollars) in September, up 18.3 percent from the previous month, according to the Financial Supervisory Service (FSS).

Corporate bond issuance advanced 20.6 percent over the month to reach 8.88 trillion won, leading last month's overall increase in corporate financing.

Companies rushed to float bonds on expectations for the Fed's rate hike in December that would lead to higher interest rates in the domestic debt-financing market.

Bonds sold by industrial companies amounted to 2.37 trillion won in September, surging from 340 billion won in the previous month.

Debt sales by financial companies reduced 8.5 percent compared with a month earlier, with issuance of asset-backed securities (ABS) sliding 2.4 percent.

Initial public offering (IPO) jumped 28.1 percent to 173 billion won, but rights offering tumbled 29.2 percent to 265 billion won last month. Endit