The amount of outstanding bonds in Korea has surpassed 2,100 trillion won as the issuance of bonds such as financial bonds, government bonds, and asset-backed securities (ABS) increased sharply in March.
The Financial Investment Association announced on April 8 that the amount of bonds issued in March totaled 79 trillion won, an increase of 10.11 percent (7.25 trillion won) from the previous month. Net issuance increased by 31.45 trillion won, boosting the aggregate value of outstanding bonds to a record high of 2000.89 trillion won.
The amount of government bonds issued in March reached 27.27 trillion won, an increase of 24.65 percent (5.35 trillion won) from the previous month. The amount of financial bonds and ABS issuance also increased by 75.9 percent and 101.4 percent to 22.285 trillion won and 2.424 trillion won, respectively.
Of the corporate bonds issued, those with a credit rating of A or higher accounted for 54.32 percent, while those with a BBB rating or lower 2.65 percent. Due to an intensifying credit crunch fueled by financial market instability, four of 25 demand forecasts in March remained unsold.
An economic recession kindled by the global spread of the novel coronavirus caused steepening where short-term interest rates declined and long-term interest rates rose despite a emergency cut in the benchmark interest rate and stabilization measures in the bond market (1.25 percent to 0.75 percent) Steepening.
As of the end of March, the balance of foreign bonds held by foreigners increased to 4.33 trillion won from the previous month (128,916.8 billion won). In the same month, foreign net purchases of Korean bonds amounted to 7.4 trillion won.