ELS, ELB issuance totals W27.76tr in H1, down 42% from prior half

The Korea Securities Depository said Tuesday that total issuance of equity-linked bonds (ELB) and equity-linked securities (ELS) in the first half of this year fell from the second half of last year.

Total ELS issuance, including ELB, reached 27.76 trillion won ($18.7 billion) in the first half of this year, up 27.7 percent from the same period a year earlier but down 41.7 percent from the second half of last year.

Of that total, ELB issuance came to 15.59 trillion won, rising 34.1 percent year on year while falling 56.6 percent from the prior half.

The number of issuances stood at 8,381, up 36.9 percent from a year earlier and 5.7 percent from the previous half.

By offering type, public offerings accounted for 85.7 percent of total issuance and private placements for the remaining 14.3 percent.

Breaking down by underlying asset type, stock-linked ELS — tied to domestic and overseas equities — made up 49.1 percent of issuance, while index-linked ELS — tied to domestic and overseas indexes — accounted for 44.7 percent.

Among major underlying indexes, ELS linked to the Kospi 200 totaled 11.12 trillion won, up 24.8 percent year on year but down 22.6 percent from the prior half.

ELS linked to the S&P 500 totaled 7.11 trillion won, while those tied to the Euro Stoxx 50 reached 4.94 trillion won. ELS linked to the Nikkei 225 amounted to 3.29 trillion won.

Total ELS redemptions in the first half of this year came to 29.44 trillion won, down 29.6 percent from the prior half.

By redemption type, maturity redemptions and early redemptions totaled 11.27 trillion won and 14.61 trillion won, accounting for 38.3 percent and 49.6 percent of total redemptions, respectively. Mid-term redemptions amounted to 3 trillion won, or 12.1 percent of the total.

ELS are derivative-linked securities whose investment returns are tied to the price of individual stocks or stock indexes. If the underlying asset meets predetermined conditions over a specified period, investors receive agreed-upon interest and the securities are redeemed early or at maturity.