This article was published on March 7, 2025, at 10:39 a.m. on the ChosunBiz MoneyMove site.
Concerns about individual investor losses are growing due to Homeplus's sudden application for corporate rehabilitation. There are also criticisms that the company deceived the market by issuing commercial papers (CP) just before applying for corporate rehabilitation.
Unlike Meritz Financial Group, which holds solid collateral in the form of real estate assets, individual investors are expected to face significant losses due to the lack of collateral. Some analysts suggest that MBK, having employed numerous financial techniques, likely did not anticipate the extent of the impact from the corporate rehabilitation process.
On the 7th, according to the investment banking (IB) industry, the total balance of Homeplus's general commercial papers and short-term bonds is estimated to amount to 186 billion won. The CP issued through Shinyoung Securities and BNK Securities and Hanyang Securities until last month consisted of 116 billion won, and short-term bonds worth 70 billion won. The most recently issued CP was worth 5 billion won with a maturity of six months on February 21. Until submitting the application for corporate rehabilitation on the 4th, it had secured funding in the market.
The securities firms that acquired Homeplus's CP sold them to investors after passing through their retail departments. It has been confirmed that Shinyoung Securities and Hanyang Securities have already sold all issued bills from Homeplus. Meanwhile, in the 'KCGI public offering high-yield securities (mixed bonds)' and 'KCGI public offering high-yield security type 2 (mixed bonds)' that include Homeplus's short-term bonds, each bond was written down by 80%, confirming the losses.
Just before applying for corporate rehabilitation, Homeplus's issued CP and the commercial paper credit rating of 'A3' were the lowest among investment-grade ratings. However, the interest rates set at the level of 6-7% likely attracted considerable investor demand. As Homeplus has entered the corporate rehabilitation process, the CP and commercial papers will be classified as rehabilitation debts, making debt rescheduling inevitable. Particularly, since these rehabilitation debts lack collateral, it is expected that they will fall behind financial institutions like Meritz Financial Group in terms of repayment priority.
Securities backed by Homeplus's credit card payment debts (ABSTB·asset-backed commercial paper) are also in a state of default, leading to an inability to repay. ABSTB is a bond issued based on credit card payment debts for which Homeplus bears repayment obligations, and the outstanding balance amounts to approximately 401.9 billion won. This constitutes a separate debt from the CP and commercial papers issued by Homeplus.
ABSTB is a bond that has been securitized based on credit card payment debts entered into by Homeplus with a credit card company. When Homeplus purchases products from manufacturers using credit cards, the credit card company securitizes the right to receive future payments from Homeplus and sells it to investors. This is assessed as having high investment risks due to the lack of substantial collateral assets. If Homeplus fails to make credit card payments, bond investors will bear the losses. Unlike trading receivables (priority repayment) generated during the sales process, ABSTB is more likely to be classified as a financial debt.
Investors in real estate public funds that include Homeplus stores as underlying assets are also facing increased chances of loss. If they cannot receive rent from Homeplus immediately, it will become difficult to pay out dividends. Currently, the scale of public funds such as IGIS Asset Management and Yookyoung PSG Asset Management amounts to about 174 billion won. In the long run, with Homeplus's entry into the corporate rehabilitation process, these funds may face difficulties in liquidation. Until now, Homeplus has attempted to sell using its master lease as leverage, but the situation is expected to become more challenging with the addition of corporate rehabilitation.
The exposure of institutional investors and financial institutions to Homeplus is also considerable. Meritz Financial Group, which borrowed 1.2 trillion won from Homeplus while securing collateral through real estate trust contracts, has a relatively higher chance of recovery. However, pension funds such as the National Pension Service may face losses of about 1 trillion won. The National Pension Service invested approximately 600 billion won in redeemable convertible preferred stocks (RCPS) when MBK Partners acquired Homeplus in 2015, and due to compound rules, this amount has increased to around 1 trillion won. Additionally, companies seeking to develop Homeplus real estate and construction companies are also expected to suffer losses.