According to the Korea Financial Investment Association on the 27th, the net issuance of corporate bonds (including public offerings and private equity) from January to this day of this year was close to 16.2 trillion won. In the first quarter of last year, the net issuance reached about 14.7 trillion won, the highest ever, which is higher than this year.
Although there were many concerns that market sentiment would shrink due to the impeachment scandal that began last year due to the December 3 emergency martial law crisis, institutional investors' buying remained solid. In February this year, the issuance of public corporate bonds amounted to 15.24 trillion won, up about 4 trillion won from the same period last year.
In particular, bonds from non-flood products and chemical companies below grade A were digested without difficulty, supporting strong demand across the market. In response to the interest rate cut, most corporate bonds led to issuance for refinancing purposes.
The expansion of net issuance of corporate bonds this year was also affected by a series of issuance of capital-equivalent securities by insurance companies. This is because the demand for capital expansion to respond to the K-ICS (K-ICS) has recently increased.
According to the Korea Securities Depository, 10 insurance companies, including Hanwha Insurance, KB Insurance, and DB Life Insurance, issued new capital securities and subordinated bonds this year. The issuance scale amounts to a total of 3.85 trillion won. It was issued at 3.4 trillion won in the third and fourth quarters of last year, respectively, but the amount increased further this quarter.
The net issuance of credit-specialized financial bonds, such as credit card bonds and capital bonds, was estimated to be about 1.3 trillion won this year. It increased slightly compared to the net issuance of about 1.24 trillion won in the first quarter of last year.
On the other hand, issuance of public bonds showed net repayment in the first quarter of this year for the first time since 2019. According to the Korea Financial Investment Association, government bonds have been net repaid by about 1.4 trillion won this year.
In the first quarter of this year, simple issuance exceeded 23 trillion won, higher than the same period last year, but it is in contrast to the net issuance of 5.18 trillion won in government bonds. However, if policy uncertainty disappears, this trend is expected to reverse again.
The inflow of funds into bond funds continues. According to FnGuide, a financial information company, the set amount of domestic bond funds was KRW 79.5265 trillion as of this day, up 18% (about KRW 12 trillion) from the beginning of the year.
Lee Hwa-jin, a researcher at Hyundai Motor Securities, said, "Due to strong demand for high-interest credit, deficit companies such as non-prime bonds and chemical industries also showed strong issuance," adding, "However, as interest rate advantages gradually weaken, differentiation by industry and company is expected to become clearer due to the impact of tariffs."
On the other hand, by group company, Hyundai Motor Group's corporate bond issuance was the highest at 5.43 trillion won so far this year.
This is due to the large amount of corporate bonds issued by credit companies within the group. Hyundai Commercial and Hyundai Card each issued 1.2 trillion won worth of corporate bonds.
SK, a regular corporate bond group, continued to issue actively in the first quarter of this year. A total of 4.743 trillion won of corporate bonds were issued, including 700 billion won for SK Hynix and 430 billion won for SK Telecom. Reporter Myung Ji Ye
