Homeplus has applied for court receivership (corporate rehabilitation procedure) unexpectedly, and the impact is affecting investors. Investors who purchased bonds issued by Homeplus to raise funds are at risk of losing money. In particular, the controversial bond is an electronic short-term bond (ABSTB) that securitizes card payment receivables generated from payments made to suppliers with a purchasing-only card.
Homeplus applied for court receivership on 4th, leading to a suspension of repayment on the 401.9 billion won ABSTB. This securitized bond was also sold to individual investors through securities firm private banking windows.
The key issue is how to classify the nature of this bond. Since Homeplus stated it will normally repay trade debts but defer financial debt payment, if the bond is classified as a financial claim, investors will have to bear losses.
In fact, this practice of managing liquidity using purchasing-only cards is commonly employed not only by retail operators like Homeplus but also by general corporations. Companies like Lotte Construction and Hyosung Chemical, which are struggling with cash flow due to declining business conditions, also enter into agreements with credit card companies to purchase items with purchasing-only cards.
When purchasing required raw materials or goods with a card, the card issuer provides funding for the goods suppliers instead of paying the receivable, issuing a securitized bond based on the receivable. This securitized bond effectively acts as the corporation's short-term borrowing fund.
A securities industry official noted, "Ultimately, the court will decide, but the securitized bond is a claim that is recorded as a liability by the special purpose company (SPC) that issues it," adding that "given the factual situation, there is a substantial chance it could be deemed a financial claim." Homeplus is also categorizing unaccounted purchasing-only card payments as financial liabilities in its audit report.
Homeplus is rebutting claims that Shinyoung Securities, which issued the ABSTB, sold it to consumers through retail channels, stating that it is "unrelated to Homeplus."
In general, trade receivables are claims that arise from a company's operations and are not lending claims. Additionally, trade receivables should not be owed by a financial institution.
However, some analysts suggest that there is a possibility this could be viewed as trade receivables that Homeplus must repay. This is because the underlying asset that created the securitized bond was the payment made for purchasing goods from suppliers.
In particular, those selling the securities and investors claim that it should be recognized as trade receivables. If classified as financial claims, there is a risk of being embroiled in issues of improper sales, which is expected to intensify conflicts of interest between securities firms and investors.
Ultimately, we must wait for the court's decision. Given that disputes among stakeholders are anticipated, there is a high likelihood that South Korea's unique investor protectionism will be triggered in this process. Bonds are not financial products like ordinary deposits that protect the principal, and investment risks can be assessed to some extent through credit ratings.
Those who invested in the Homeplus ABSTB expected high returns by purchasing risk assets but have indicated they "were not informed of the investment risks." Investors have also begun to protest. Homeplus ABSTB investors plan to demand recognition of the ABSTB as trade receivables in front of the Financial Supervisory Service at 11 a.m. on the 12th by forming the "Emergency Countermeasure Committee for Securitized Bond Victims."