In March, the issuance of non-investment-grade commercial paper (CP) and short-term bonds decreased by more than 50% compared to a year ago. This is interpreted as a result of the tightening in the short-term funding market following Homeplus's corporate rehabilitation process.
According to Yonhap Infomax on the 23rd, 229.6 billion won worth of CP and repurchase agreements rated A3 or lower were issued from the 4th, when Homeplus filed for corporate rehabilitation, to the 20th. This represents a 58.95% decrease compared to 559.3 billion won issued a year ago.
During the same period, the total size of CP and electronic short-term bonds was recorded at 81.1 trillion won. This is an approximate increase of 38.00% compared to 58.8 trillion won during the same period last year. In other words, although the total issuance of CP and repurchase agreements increased from the previous year, the issuance of non-investment-grade bonds decreased.
It is noticeable that the issuance size of A3 or lower has significantly decreased compared to January and February. During this period, the issuance amounts were 10.8 trillion won and 10.3 trillion won, respectively.
This is interpreted as a consequence of securities firms approaching non-investment-grade CP and repurchase agreements conservatively since Homeplus applied for corporate rehabilitation. Trust in A3-grade corporations has diminished, leading to a significant drop in customer inquiries, and retail channels handling these products have almost ceased sales.
However, the market believes that this atmosphere will have a limited impact on the overall corporate bond market. On the 11th, SL Corporation, rated BBB, failed to fill its target amount for some tranches in a demand forecast, but the explanation is that the small proportion of BBB-rated corporate bonds will not significantly affect the overall credit market. In the short-term funding market, A3-rated bonds are considered to be equivalent to BBB-rated in the corporate bond market.