Bond issues by Korean Inc. up 18% in Sept, equity sales off 55%

[Source: Financial Supervisory Service]

Debt issues by Korean Inc. jumped 18.2 percent on month in September as companies rushed to refinance debt before interest rates go higher, while stock offering shrank 54.5 percent amid tepid stock market.

According to data released by the Financial Supervisory Service on Wednesday, bond and stock offerings by Korean companies valued at 19.62 trillion won ($16.8 billion) in September, edging up 1.4 percent from the previous month mainly due to jump in debt sales.

Bond issues amounted to 17.58 trillion won, expanding 18.2 percent on month.

Corporate bond issues surged a whopping 698.4 percent from a month ago to 4.95 trillion won. The offering was mostly in mid-to-long dated papers for refinancing, with 49.9 percent sold by A or below investment grade issuers, data showed.

The corporate bond balance as of late September came to 618.21 trillion won, up 0.5 percent from the previous month.

Commercial paper issues were off 5.4 percent on month to 36.2 trillion won. Short-term debenture issuance also fell 11.4 percent to 101.13 trillion won.

Stock issues sank 54.5 percent on month to 2.03 trillion won.

Rights offering gained 51.7 percent against a month-ago period to 586.3 billion won but initial public offerings showed a sharp drop as the country’s IPO fever cooled off.

There were 14 IPOs in September, compared with 12 last month, with their valuation 64.6 percent smaller at 1.44 trillion won. The bulk came from 1.08 trillion won IPO by Hyundai Heavy Industries Co., which debuted on the main Kospi bourse, and the remaining 13 joining the secondary Kosdaq, were small caps worth less than 100 billion won.

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