This article was posted on the ChosunBiz MoneyMove (MM) site at 4:49 p.m. Nov. 26, 2025.
As government bond yields continue to move unsettledly, tension is rising in the corporate bond market. Although government bond yields that had surged to their highest levels of the year have recently eased somewhat, volatility in the bond market has dampened investor sentiment. In particular, corporations preparing investor demand forecasts to issue corporate bonds have repeatedly postponed or withdrawn their schedules, creating what appears to be an emergency for fundraising.
According to the investment banking industry on the 26th, SK Telecom recently withdrew plans to issue 150 billion won in corporate bonds. SK Telecom had originally been considering holding an investor demand forecast on Dec. 3 and then increasing the issue up to 240 billion won.
SK Telecom has corporate bonds maturing in November for 100 billion won and in December for 110 billion won. With cash and cash equivalents at about 1,384.5 billion won as of the third quarter, short-term repayment capacity is seen as not problematic. However, because large investments such as expansion of artificial intelligence (AI) business and building data centers are continuing, the company faces substantial medium- to long-term funding needs, and market volatility became a burden on the issuance schedule, analysts said.
Heungkuk Life Insurance also postponed plans after trying to push for its second subordinated bond issuance of the year. Heungkuk Life Insurance planned, after investor demand forecasting, to issue subordinated bonds worth 100 billion won (up to 200 billion won) on the 28th. Of the funds raised, 80 billion won would have been used to refinance existing subordinated bonds whose call option maturities were coming due, and the remaining 120 billion won would have been used to expand liquidity. But as the 10-year government bond rate, which is the benchmark for subordinated bond issuance, surged and the burden of additional spreads grew, the company decided to wait and watch market conditions for now.
KCC Glass postponed its corporate bond issuance scheduled for the 27th of this month to Dec. 10. KCC Glass had proposed a desired coupon range of -30 to +30 basis points against the individual average market yield for a single three-year 100 billion won issue (1 bp = 0.01 percentage point). The company's three-year average market yield moved around 2.9–3.0% in October but rose to 3.423% in November. Although the recent rise has eased somewhat, it still remains in the high 3.2% range, meaning the company would have to offer yields more than 30 basis points higher than in October.
The direct background for corporations repeatedly delaying corporate bond issuance is the sharp rise in government bond yields. On the 26th, the three-year government bond yield was 2.8870% annually, and the 10-year was 3.242%, slightly down from the previous day. While Korea's government bond yields have eased somewhat under the influence of U.S. Treasury yield declines, the market is still judged to be uneasy. In fact, government bond yields turned upward around mid-October and have repeatedly hit record highs each day this month.
Corporations that withdrew or postponed corporate bond issuance are closely watching the Bank of Korea's monetary policy committee decision on the benchmark rate scheduled for the 27th. However, because the market widely expects the benchmark rate to be held steady, there is a view that more corporations may delay corporate bond issuance for the time being.
Signs of weakened corporate bond investor sentiment are evident in the statistics. According to the Financial Supervisory Service, corporate bond issuance last month totaled 23,361.11 billion won, down 16.6% from the previous month. At that time, the U.S. Federal Reserve and the Bank of Korea showed unfavorable stances toward rate cuts, keeping government bond yields on an upward trend. The three-year government bond yield rose sharply by 12 basis points over the month from 2.596% annually on the 1st to 2.716% on the 31st of last month.
The problem is that corporate bond maturities next early year amount to tens of trillions of won. According to the Korea Financial Investment Association's bond information center, corporate bond maturities in January and February next year are estimated at 11.45 trillion won and 12.66 trillion won, respectively. If many fourth-quarter issuance plans are postponed, some corporations could face disruptions in cash management, raising concerns.
An industry official said, "With recent rises in government bond yields, trading in credit products has decreased and the volumes that do trade are priced at higher yields, so corporations are postponing bond issuance or reexamining their plans," adding, "Because institutional investors will have execution demand at the beginning of the year, the key is whether the market stabilizes somewhat by then."