À̹ÌÁö È®´ë South Korea¡¯s corporate bond market on recovery amid improved investor sentiment [Image source: Gettyimagesbank]
South Korea¡¯s corporate bond market is expected to gain momentum in February after debt issuance in January hit an all-time high in 7 years as Korean Inc. readies to raise funds through public offering amid improved investor sentiment.
According to multiple sources from the investment bank industry on Sunday, a number of companies will hold book building sessions this week to issue corporate debt. They are Lotte Shopping Co. rated AA-, KB Securities Co. rated AA+, Kiwoom Securities Co. rated AA-, SK Rent-a-Car Co. rated A-, and CJ CheilJedang Corp. rated AA.
There will be more book building sessions held by companies in February, including Hotel Shilla Co., LG Innotek Co., and SK hynix Inc., all rated AA-.
SK hynix is expected to issue this year¡¯s largest amount of debt at 600 billion won ($488 million) with prospects that it may up its offering upon overwhelming demand to beat LG Chem Ltd.¡¯s 800 billion won as largest issuer.
In February, corporations with relatively lower credit ratings are scheduled to hold book building sessions, including HL D&I Halla with a rating of BBB. Securities firms like KB Securities, Kiwoom Securities, and Daishin Securities that have been under concerns about worsening financial structure will also seek demand in Febraury.
¡°There was a negative outlook on securities firms¡¯ bonds until late last year as they were exposed to real estate project financing risk,¡± said an unnamed official from a securities firm. ¡°Market conditions have turned friendlier now.¡±
Financial investment industry expect demand for corporate bonds to remain strong in February as investors believe interest rates have hit their peak and the government has been eager to revive the bond market through policy measures.
According to Hanwha Investment & Securities, corporate debt sale of bonds rated A and above has reached 5 trillion won as of Jan. 24, the highest since the same period in 2017.
By Kang Bong-jin and Han Yubin
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]