On Feb. 2, it was found that capital raised by domestic corporations through direct financing jumped sharply from the prior month. Initial public offerings (IPOs), paid-in capital increases, corporate bonds, and commercial paper all rose across the market.
On the 31st, the Financial Supervisory Service said funds raised by corporations in Feb. this year by issuing stocks or corporate bonds totaled 19.2497 trillion won, up 1.5057 trillion won (8.5%) from the previous month.
Direct financing refers to a method in which a company raises funds by issuing stocks or bonds directly without going through a financial company.
Funds raised through stocks last month totaled 341.5 billion won, a sharp increase of 233.3 billion won (215.6%) from the prior month. The number of public offerings also rose from four to seven.
Specifically, there was one IPO on KOSPI and two on KOSDAQ, amounting to 249 billion won and 41.8 billion won, respectively. Paid-in capital increases totaled 50.7 billion won, with the number of cases rising from two to four from the previous month. All of those paid-in capital increases were carried out by KOSDAQ-listed companies.
Corporate bond issuance reached 18.9082 trillion won, up 1.2724 trillion won (7.2%) from the prior month. Straight corporate bonds were issued in 50 deals totaling 5.1137 trillion won, down 2.0628 trillion won (28.7%) from the previous month (59 deals, 7.1765 trillion won). Most were issued for refinancing purposes (76.0%), followed by operating purposes (19.3%) and facility purposes (4.7%).
High-grade issues rated AA or above accounted for 3.355 trillion won, or 65.6%, while A-rated issues made up 30.8% and BBB or lower accounted for 3.6%. By maturity, medium-term bonds totaled 4.9097 trillion won, making up most (96.0%). The shares of long-term and short-term bonds were 1.0% and 3.0%, respectively.
In particular, financial bonds came to 193 deals totaling 13.6709 trillion won, up 3.6529 trillion won from the previous month (149 deals, 9.7141 trillion won). Of that, the increase in bank bonds was the largest at 1.8106 trillion won. Other financial bonds and financial holding company bonds increased by 1.6263 trillion won and 216 billion won, respectively.
The total balance of corporate bonds stood at 748.4481 trillion won at the end of Feb., down 4.4104 trillion won (0.6%) from the previous month (752.8585 trillion won). Straight corporate bonds recorded net redemptions of 3.4103 trillion won, extending the net redemption trend from Jan.
Commercial paper (CP) and short-term bonds totaled 159.5722 trillion won in Feb., up 4.842 trillion won (3.1%) from the prior month. During this period, CP decreased by 9.0367 trillion won, but short-term bonds increased by 13.8787 trillion won.