SEOUL, September 30 (AJP) —South Korean securities offerings fell 38 percent on month in August on sluggish stock market and bond demand from higher rates, government data showed Wednesday.
Companies issued securities worth 16.33 trillion won ($12 billion) in August compared with - 15.88 trillion won in bonds and 454.9 billion won in equities, according to the Financial Supervisory Service (FSS).
Bond sales fell 14.8 percent, largely due to smaller financial issues. Issuance by banks, financial holding companies and non-bank lenders stopped at 14.81 trillion won, down 32.2 percent from July, after the central bank's back-to-back rate hikes.
Non-bank lenders cut back the most, selling 7.08 trillion won of bonds, down 42.4 percent. Bank bond sales fell 14.9 percent to 6.19 trillion won, while financial holding companies sold 1.55 trillion won, down 32.4 percent.
The August slump adds to a weak year.
Stock and bond sales totaled 169.25 trillion won in the first eight months of 2026, falling 14.4 percent from a year earlier - equities down 50.4 percent and bonds down 12.5 percent.
August stock sales were 48.7 percent below a year earlier, and bond sales 14.8 percent lower.
Equities offering fell 69.5 percent from July, though the drop mostly reflected an unusually large deal the month before.
In July, Hanwha Solutions, the solar and chemicals arm of Hanwha Group, raised 1.17 trillion won by placing new shares to existing shareholders in a rights offering.
Rights offerings brought in 294.3 billion won in August, down 79.4 percent. Initial public offerings rose 160.7 percent to 160.6 billion won, as six companies listed on KOSDAQ, the country's tech-heavy junior market.
Small and midsized firms raised 420.7 billion won, or 92.5 percent of all stock sales, while large companies raised 34.3 billion won.
Bond sales by non-financial companies all but dried up. Their issuance plunged 88.8 percent to 310 billion won, most of which went to refinance maturing debt.
The companies that did come to market were lower-rated, and they borrowed short. Of the unsecured bonds sold, 71.4 percent were rated A and 28.6 percent BBB or below, with none rated AA or higher.
More than half, 54.8 percent, matured within a year, and the rest within five years. No company sold bonds longer than five years amid uncertainties on how long current tightening cycle can last.
The yield on three-year AA- corporate bonds, a benchmark for corporate borrowing, rose to 4.52 percent at the end of August from 4.46 percent a month earlier.
Non-financial companies repaid 936 billion won more in bonds than they sold, the second straight month of net redemptions. Total corporate bonds outstanding still edged up 0.2 percent to 768.85 trillion won.
Asset-backed securities were the exception, with issuance more than tripling to 752.4 billion won.
Short-term borrowing also slowed. Companies sold 149.07 trillion won of commercial paper and short-term bonds in August, down 14.9 percent from July. Commercial paper issuance fell 16.5 percent to 46.25 trillion won, and short-term bond sales fell 14.2 percent to 102.82 trillion won.
Commercial paper declined across the board. Standard commercial paper fell 24.5 percent, asset-backed commercial paper tied to real estate projects fell 10.1 percent and other asset-backed paper fell 6.8 percent.
Among short-term bonds, standard issuance fell 21.2 percent and issuance backed by real estate project assets slipped 0.9 percent, while other asset-backed short-term bonds rose 10.9 percent.
Short-term funding stayed above last year's levels. Commercial paper issuance was up 21.1 percent from August 2025, and short-term bond issuance was up 7.3 percent.
Outstanding commercial paper rose 0.9 percent from the end of July to 251.80 trillion won, while outstanding short-term bonds fell 4.0 percent to 95.19 trillion won.
AJP Takeaways
- The Financial Supervisory Service said South Korean companies raised 16.33 trillion won ($12 billion) through stock and bond sales in August, down 38 percent from July, with financial bond issuance by banks and other lenders falling 32.2 percent to 14.81 trillion won and accounting for most of the decline.
- The Financial Supervisory Service's figures showed ordinary corporate bond issuance by nonfinancial companies plunged 88.8 percent to 310 billion won in August, with every won going to refinance existing debt and none of the unsecured bonds rated AA or higher.
- The Bank of Korea's data showed the yield on three-year AA- corporate bonds rose to 4.52 percent at the end of August from 4.46 percent at the end of July, a figure AJP drew from central bank statistics to supplement the Financial Supervisory Service's monthly release.
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