Bond Market
Domestic companies’ forecasting of corporate bond demands are perfectly meeting the actual sales this month.
According to industry sources, Moorim Paper conducts demand forecasting on April 26 in order to issue corporate bonds worth 40 billion won in total next month. The fund prepared by the corporate bond issuance is slated to be used for repayment of borrowings and as operating funds.
Likewise, TS Corporation conducts demand forecasting on April 28 before issuing corporate bonds worth 30 billion won (US$27 million) for the same purposes. Polaris Shipping is planning to do demand forecasting on April 28 as well. The company is planning to prepare 30 billion won (US$27 million) to repay its borrowings.
According to experts, their demand forecasting is likely to be successful. This is because the local corporate bond issuance market is booming now and the previous demand forecasting for AA- bonds and those with lower ratings turned out well. This month alone, 15 companies did demand forecasting and none of them failed, including Ajou Construction (BBB+), Poongsan Corporation (A) and SK Engineering & Construction (A-).
Another positive factor is the return of the National Pension Service (NPS) to the market after its lukewarm stance that resulted from the Daewoo Shipbuilding & Marine Engineering issue. “The National Pension Service’s recent subscription for the bonds of Korea Hydro & Nuclear Power is highly meaningful,” said an industry source, adding, “The NPS is likely to expand its investment to cover AA bonds in the near future.”