Korea seeing fresh CBO issuance

A raft of Korean security houses are keen to issue a new range of collateralized bond obligations, breathing life into the moribund Korean bond market.

Primary collateralized bond obligations (CBOs) worth W360 billion (US$320 million) will be issued early next month, bringing the CBO market out of a lull, the Financial Supervisory Service (FSS) said Wednesday.

Sejong Securities (KSE:16420) and Shin Heung Securities (KSE:01500) will submit a securities report to the FSS on Saturday to pursue the issuance.

Some 30 companies that cannot issue corporate bonds on their own due to relatively lower credit ratings will take part.

Meanwhile, a stream of primary CBOs will be issued next month. Samsung, Shinhan and Hanhwa Securities companies and a few more are negotiating the terms for raises in credit with the Korea Credit Guarantee Fund in this regard.

Samsung Securities is expected to issue W500 billion worth. Hanhwa Securities and Hannuri Investment & Securities will together issue the same amount. Shinhan Securities and Daehan Investment Trust Management & Securities will together issue W1 trillion worth of primary CBOs.

"The issuing of primary CBOs will likely liven up and bring stability in the capital market," said Yu Heung-su, director-general of disclosure supervision department at FSS.


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