Financial Supervisory Service (FSS) reported that direct corporate financing increased to KRW11.34 trillion in September 2009, up KRW4.92 trillion or 76.5% from the preceding month’s KRW6.43 trillion mainly as a result of an increase in corporate bonds and ABS issuances.
Equity Financing
In September, stock issues rose by KRW856.4 billion over the preceding month to KRW1.67 trillion. IPOs went down by KRW136.6 billion to total KRW120.2 billion for the cited period. During the period, two companies listed on the KOSPI market, and six companies on the KOSDAQ market. Meanwhile, secondary offerings increased by KRW993.0 billion to KRW1.55 trillion in September from KRW557.2 billion in August.
Debt Financing
Corporate bond issues rose in September to KRW7.10 trillion, up KRW3.27 trillion from the preceding month. Non-financial companies’ bond issues increased by KRW1.33 trillion to KRW3.74 trillion in September with net issues amounting to KRW1.59 trillion.
By size, large companies issued KRW3.60 trillion in corporate bonds in September compared to KRW2.40 trillion in August while small and medium-sized enterprises issued KRW136.7 billion in September.
By purpose, issuances for facility investments fell by KRW224.7 billion over August to KRW505.3 billion while issuances for operating capital rose by KRW1.05 trillion on month to KRW2.59 trillion. Issuances for refinancing increased by KRW511.0 billion to KRW641.0 billion in September.
Among corporate bonds issued in September, KRW3.14 trillion or 85.6% were rated A or higher while KRW89.7 billion were rated BB or lower.
Financial company issues, excluding those of banks, was up KRW912.8 billion on month to KRW2.17 trillion from KRW1.26 trillion. Publicly offered ABS issues rose by KRW1.02 trillion on month to KRW1.19 trillion from KRW170.0 billion. Bank debenture issues rose to KRW2.57 trillion, up KRW790.0 billion from KRW1.78 trillion in August.
Funds raised through public offerings that are less than KRW1.0 billion per each offering decreased by KRW1.1 billion to KRW30.6 billion in September from KRW31.7 billion in August.