Korea's credit bond market will see KRW 2.3 trillion in issuances during the week of July 20-24, according to data from the Korea Financial Investment Association and Yonhap Infomax released July 19. The majority of this week's issuance is concentrated on July 20, when KRW 2.2 trillion+ in bonds — including KRW 850 billion in Korea Development Bank special bank bonds and KRW 400 billion in securities finance bonds — are scheduled for release. This represents a significant decline from last week's KRW 7.8 trillion issuance volume, attributed to the approaching vacation season in late July and early August as well as the semi-annual earnings reporting period. The reduced issuance follows a week dominated by public corporation bonds from Korea Electric Power and Korea Housing Finance Corporation, alongside financial sector bonds from banks, securities firms, card companies, and capital firms.
Korea Development Bank and Financial Institutions Issue KRW 2.2 Trillion on July 20
On July 20, the Korea Development Bank will issue KRW 850 billion in special bank bonds, while securities finance bonds totaling KRW 400 billion are also scheduled for release. The combined issuance for that single day exceeds KRW 2.2 trillion, representing the bulk of the week's total credit bond supply. Last week's KRW 7.8 trillion issuance included substantial volumes from Korea Electric Power, Korea Housing Finance Corporation, and various financial institutions including banks, securities firms, card companies, and capital firms.
SK Ecoplant, Lotte Chemical, and KCC Schedule Corporate Bond Demand Forecasting
Corporate bond demand forecasting is scheduled for three companies this week. On July 22, SK Ecoplant will conduct demand forecasting for KRW 100 billion in corporate bonds. On July 23, Lotte Chemical will hold demand forecasting for KRW 200 billion in bonds, and KCC will conduct demand forecasting for KRW 200 billion on the same day. Choi Sung-jong, a researcher at NH Investment & Securities, stated, "Typically, July and August do not see much issuance," adding, "There is an atmosphere where corporate bond issuance is not going well recently (due to high interest rates)."
Treasury Bonds and Monetary Stabilization Bonds Total KRW 4.2 Trillion in Planned Issuances
Beyond credit bonds, the government plans to issue approximately KRW 3.2 trillion in treasury bonds next week, while the Bank of Korea has scheduled around KRW 1 trillion in Monetary Stabilization Bonds. On July 20, auctions are scheduled for KRW 2.8 trillion in 5-year treasury bonds, KRW 600 billion in 91-day Monetary Stabilization Bonds, and KRW 160 billion in individual treasury bonds. On July 21, a KRW 400 billion auction for 20-year treasury bonds will take place. On July 22, a subscription issuance of KRW 500-600 billion in 1-3 year Monetary Stabilization Bonds is planned.
Market Analysts Cite High Rates and Seasonal Factors Impacting Issuance Activity
Kim Sang-in, a researcher at Shinhan Investment & Securities, stated, "With heightened growth expectations, bond yields have surged and the credit market has become vulnerable to interest rate risk," while adding, "In the mid-to-long term, favorable growth will create a friendly credit environment." Kim continued, "Although the intensity and speed of growth benefits will vary by industry, positive impacts on the overall credit market are expected." Last week, the Bank of Korea raised the base rate to 2.75% with a 25 basis point increase at the Monetary Policy Committee meeting — the first rate hike in 3.5 years. Market impact was limited as the increase had been anticipated.
FAQ
What is the total credit bond issuance planned for the week of July 20-24 in Korea?
KRW 2.3 trillion in credit bonds are scheduled for issuance during the week of July 20-24, according to data from the Korea Financial Investment Association and Yonhap Infomax released July 19. The majority of this volume is concentrated on July 20, when KRW 2.2 trillion+ in bonds will be issued.
Which companies are conducting corporate bond demand forecasting this week?
SK Ecoplant will conduct demand forecasting for KRW 100 billion in corporate bonds on July 22. Lotte Chemical and KCC will each hold demand forecasting for KRW 200 billion in bonds on July 23.
Why did this week's credit bond issuance volume decrease compared to last week?
This week's KRW 2.3 trillion issuance represents a significant decline from last week's KRW 7.8 trillion, attributed to the approaching vacation season in late July and early August as well as the semi-annual earnings reporting period.
