SEOUL, April 14 (Yonhap) — Sales of short-term corporate bonds in South Korea rose 50 percent in the first quarter from a year earlier, amid growing preference for such a financing method, data showed Tuesday.
Local firms floated 383.2 trillion won (US$258.4 billion) worth of short-term bonds in the January-March period, compared with 255.4 trillion won from a year earlier, according to the data from the Korea Securities Depository (KSD).
Compared with the previous quarter, the amount rose 9.5 percent, the data showed.
Short-term bonds refer to those that come due within one year, with the minimum amount of 100 million won or more per issue.
“Companies used to raise capital through commercial papers (CP), or unsecured promissory notes, but have been switching to short-term bonds due to concerns over forgery, as it could be processed electronically,” the KSD said.
The KSD said 99.7 percent of the short-term bonds issued in the first quarter mature within three months.
By type, the issuance of general short-term bonds jumped 62.8 percent on-year to 297.2 trillion won. Sales of securitized bonds, floated by special purpose companies (SPC), increased 18 percent to 86 trillion won.
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