DSL Issuance Tops 16 Trillion Won in First Half of 2017

With the rising demand for reinvestment due to the advanced redemption of equity-linked securities (ELS), the issuance of derivatives-linked securities (DLS) in the first half of this year topped 16 trillion won (US$14 billion), boosted by the increase of public offering.

According to the Korea Securities Depository (KSD) on July 12, the total amount of DLS issuance, including derivatives-linked bonds (DLB), stood at 16.15 trillion won (US$14.13 billion) in the first half of the year. The figure is the highest ever half-yearly issuance after DLS was first issued in the South Korean stock market in 2005.

For the DLS issuance, public offering and private placement amounted to 3.1 trillion won (US$2.71 billion) and 52.8 billion won (US$46.19 million), respectively, accounting for 19.2 percent and 80.8 percent of the total. Private placement increased 5.8 percent compared to the second half of last year, while public offering grew 17.5 percent.

For DLS issuance by underlying assets, interest rate totaled 8.09 trillion won (US$7.08 billion), while credit and index amounted to 4.52 trillion won (US$3.96 billion) and 3.39 trillion won (US$2.96 billion).

An official from the KSD said, “Recently, we are trying to issue DSL by mixing various underlying assets in order to reduce price fluctuation.”