Bond offering by Korean Inc. hits record high of $13 bn in April

2021.05.03 13:42:53 | 2021.05.03 13:45:49

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Bond offerings by Korean Inc. hit 14.42 trillion won ($12.9 billion) in April, the highest amount issued for a single month, as companies rushed to raise debt before rates went higher.

According to Yonhap Infomax data on corporate bond market compiled by Korea Investment & Securities Co., corporate bond issuance in April came to monthly record of 14.42 trillion won, up 111.76 percent from the previous month.

Net issues last month also reached a record high of 6.63 trillion won, beating the previous record of 6.38 trillion won in February last year.

April is a traditionally strong month for bond issuance because companies tend to return to the debt market after finishing annual reports and general shareholders meetings in March.

On top of the seasonal effects, companies rushed with issuance last month as they projected interest rates would go higher next year.

Debt issues were 439 percent oversubscribed on average, and priced at a spread of 7.4 basis points below the market yields, indicating investors’ hardy appetite for debts amid ample liquidity, according to Korea Investment & Securities.

A number of debt issuers sold larger amounts than they had planned in society and governance (ESG)-themed and high yield bonds.

SK hynix Inc. raised 1.18 trillion won in ESG-themed AA0 debt, becoming the single biggest issuer after doubling its initial 600 billion won upon overwhelming demand.

By Ahn Gab-seong and Lee Soo-min

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