S. Korea's corporate bond sales jump on expectations for Fed's rate hike

SEOUL, March 27 (Xinhua) -- Corporate bond sales in South Korea jumped in February as companies raised money ahead of the expected interest rate hike in the United States, financial watchdog data showed Tuesday.

Corporate bond issuance amounted to 13.04 trillion won (12.2 billion U.S. dollars) in February, up 18.9 percent from a month earlier, according to the Financial Supervisory Service (FSS).

Bonds issued by industrial firms surged 72.1 percent, with the sales of asset-backed securities (ABS) soaring 172.8 percent last month.

Companies rushed to raise money ahead of the expected rate increase by the U.S. Federal Reserve, which hiked its target rate by a quarter percentage point last week to a range of 1.50-1.75 percent.

The Bank of Korea (BOK), South Korea's central bank, was forecast to lift its benchmark rate in the near future as its target rate of 1.5 percent was lower than the U.S. policy rate.

The reversal in policy rates between South Korea and the United States may trigger an abrupt foreign capital flow out of the South Korean market.

Bonds issued by financial companies declined 10.9 percent, with bank-issued bonds plunging 24.6 percent.

Corporate equity financing, including rights issuance and initial public offering (IPO), jumped 97.7 percent over the month to 956.7 billion won (894 million U.S. dollars) in February. Enditem