Short-term bond issuance hits W990tr in H1, up 90.3% on-year

Short-term bond financing channeled through the Korea Securities Depository totaled 990 trillion won ($658 billion) in the first half of this year.

The Korea Securities Depository said Tuesday that short-term bond issuance reached 990 trillion won in the first half of this year, up 90.3 percent from the same period last year and 54.7 percent from the second half of last year.

By type, general short-term bonds — issued by financial institutions and ordinary companies — came to 806.9 trillion won, a 121.1 percent increase from a year earlier. Asset-backed short-term bonds totaled 183.1 trillion won, up 18.1 percent over the same period.

General short-term bonds accounted for 81.5 percent of total issuance, with asset-backed short-term bonds making up the remaining 18.5 percent.

By maturity, bonds with terms of three months (92 days) or less amounted to 987.7 trillion won, representing 99.8 percent of the total.

By credit rating, A1-rated issuance stood at 946 trillion won, or 95.6 percent of the total. Bonds rated A2 or below totaled 44 trillion won.

By sector, securities firms led issuance at 615.8 trillion won, up 207.1 percent from a year earlier and 111.5 percent from the previous half-year. Asset-backed entities followed at 183.1 trillion won, then other financial businesses — including credit card and capital companies — at 104.9 trillion won, and general and public enterprises at 86.2 trillion won.

Short-term bonds are corporate debt instruments issued with maturities of one year or less and a minimum face value of 100 million won, with issuance, distribution and rights exercise all handled electronically through a registered electronic institution. The instrument was introduced in 2013 as an alternative to commercial paper and the call money market.

Under the system, issuing companies can process physical certificate management, seal affixing and investor searches electronically through the Korea Securities Depository's electronic short-term bond platform.