Korean Inc.'s stock, debt issues up 10.8% on yr in 2020

[Source: Financial Supervisory Service]

Stock and debt issues by Korean Inc. increased nearly 11 percent on year in 2020 as major South Korean companies turned to direct financing to repay debt amid record-low interest environment.

According to data released by the Financial Supervisory Service (FSS) on Wednesday, Korean companies raised 194.48 trillion won ($176.4 billion) in funds by selling stocks and bonds in 2020, up 10.8 percent from the previous year.

Equity issuance more than doubled to 10.9 trillion won last year, of which 3.8 trillion won came from initial public offerings (IPOs), up 55 percent from the previous year. There were fewer debuts last year but the value was higher with a number of high-profile names like Big Hit Entertainment (962.6 billion won), SK Biopharmaceuticals (652.3 billion won), and Kakao Games (384 billion won).

There were total five new entrants in the main Kospi and 82 in secondary Kosdaq.

Korean companies raised 7.09 trillion won by issuing new shares last year, more than doubling from 4.2 trillion won in the previous year. In particular, the number of companies securing large-scale funds to repay debt in the Kospi market increased last year, the FSS said, such as Doosan Heavy Industries and Korean Air Lines.

In 2020, issues of corporate bonds totaled 183.5 trillion won, up 7.9 percent from the previous year. Issues of general corporate bonds fell while those of financial notes and asset-backed securities increased.

General corporate bonds contracted 7.2 percent on year to 42.06 trillion won in 2020. Financial debentures, meanwhile, increased 9.8 percent to 120.6 trillion won and asset-backed securities 39.3 percent to 20.8 trillion won.

Commercial paper and short-term debenture issuance contracted 7.3 percent on year to 1,401 trillion won.

A total 371.5 trillion won worth of commercial paper was issued last year, down 4.4 percent from the previous year, and 1,029.4 trillion won worth of short-term debentures, down 8.3 percent.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]