This article was displayed on the ChosunBiz MoneyMove (MM) site at 9:33 a.m. on Aug. 24, 2026.
In the KOSDAQ market, cases have recently continued in which corporations issue convertible bonds (CBs) on issuer-favorable terms. More companies are raising funds by issuing at a premium, with no interest or refixing (conversion price adjustment) clauses and conversion prices set as high as 40% above the reference share price. For investors, unless the share price surges, it is a structure where it is hard to expect meaningful investment revenue.
Industry observers say the rise in such CB issuance is backed by the KOSDAQ Venture Fund (KOVEN Fund) and the Public Growth Fund. As large sums, including the Public Growth Fund, flow into the KOSDAQ market, existing KOVEN funds must meet mandatory investment ratios under worse conditions. For this reason, some are worried about overheating in the CB issuance market.
According to the investment banking (IB) industry and the Financial Supervisory Service electronic disclosure system on the 24th, KOSDAQ-listed IMT(451220) decided on the 20th to issue the 6th tranche of CBs worth 10 billion won.
Looking at IMT's CB issuance terms, what stands out is that both the coupon interest and maturity interest are 0%, and the conversion price was set at 12,661 won. The conversion price is 138% of the reference share price, a near-40% premium issue. There is no refixing clause tied to share price fluctuations. There is no interest payable even when exercising the put option, and interest of 0.5% per year is paid only if the issuer exercises the call option.
Asset managers including Soosung Asset Management, C-Square Asset Management, GVA Asset Management, and Orion Asset Management participated in this CB, which is unilaterally favorable to the issuer. They invested through their own KOVEN funds.
Issuer-favorable CB terms can be found in additional recent cases. KOSDAQ-listed Knowmerce(473980) pushed a CB issuance last month with terms similar to IMT's CB. The conversion price for Knowmerce's CB was set at 15,520 won, a 40% premium to the reference share price. The investment at the time was also executed through a KOVEN fund.
A source in the capital markets industry said, "While premium issues at 0% coupon and maturity interest and a 10%–20% premium were common before, a 40% premium issue can be seen as somewhat excessive."
The industry analyzes that the backdrop to a string of extremely issuer-dominant CB issuances is inflows of funds into the KOSDAQ market. The government launched the Public Growth Fund last year and announced plans to invest 150 trillion won over the next five years. A portion of the Public Growth Fund's capital is mandated to be invested in new shares of KOSDAQ technology-special listing companies.
The problem is that as money floods the market, managers running funds that must invest in the KOSDAQ market, including KOVEN funds, have to deploy capital under unfavorable conditions. KOVEN funds in particular must meet mandatory KOSDAQ investment ratios to receive tax benefits and priority allocations in initial public offerings.
Given this situation, there are voices of concern about overheating in CB issuance. If listed companies issue large CBs like a trend just because money is easy to raise, a liquidity crisis could erupt in a few years if they fail to repay.