S. Korea’s Corporate Bond Sales Post Sharp Decline in May

2025-06-30 01:53:18

(MENAFN) South Korea witnessed a sharp decline in corporate bond issuance last month as funding needs from both industrial and financial sectors dwindled, according to data released Monday by the Financial Supervisory Service (FSS).

In May, corporate bond sales plunged 35.9 percent month-on-month to 19.51 trillion won ($14.4 billion), reversing the double-digit growth recorded in the previous month.

Industrial companies’ bond issuance fell dramatically by 75.8 percent to 2.15 trillion won ($1.58 billion) in May compared to April.

Meanwhile, bonds issued by financial firms dropped 24.2 percent, totaling 15.13 trillion won ($11.16 billion). Conversely, asset-backed securities issuance surged 40.7 percent to 2.22 trillion won ($1.64 billion) during the same period.

The Bank of Korea has cut its benchmark interest rate by 25 basis points twice this year—in February and May—bringing it down to 2.50 percent. These recent cuts followed similar reductions of 25 basis points each in October and November of last year.

Equity financing, including initial public offerings and rights issuance, sharply rebounded in May, soaring 386.5 percent from April to reach 1.82 trillion won ($1.34 billion).

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