The securities industry is on edge following the initiation of rehabilitation proceedings for Jungang Group affiliates. Hanyang Securities is facing an exposure of 84 billion won, prompting major securities firms to assess their collateral and potential sell-down options.
According to the financial investment industry on June 17, Hanyang Securities has the largest confirmed exposure among firms linked to Jungang Group. NICE Credit Rating estimated Hanyang Securities' book exposure related to Jungang Group at 84 billion won, which includes 54 billion won related to JTBC and 30 billion won related to JoongAng Ilbo.
This amount represents a significant portion of the total exposure of 125.1 billion won across the securities sector related to Jungang Group. NICE Credit Rating noted that while the overall exposure is distributed across the financial sector, Hanyang Securities bears a relatively heavier burden compared to its assets and capital. However, Hanyang Securities has secured collateral for the related bonds, including accounts receivable, deposit return claims, and lease deposits, and is reportedly managing them through a trust structure.
Aside from Hanyang Securities, Woori Investment Securities has an exposure of 25 billion won, while iM Securities has 5 billion won. Kiwoom Securities has not disclosed its related figures.
NH Investment Securities holds some exposure but claims to have sufficient collateral. A representative from NH Investment stated, "While there are outstanding loans related to Jungang Group, we have secured collateral. We hold shares of Contentree Jungang as collateral, and their value significantly exceeds our exposure." They added that a substantial portion of the initial contract has been repaid, and the remaining amount is adequately secured, indicating that the actual exposure is lower than reported in the media.
Shinhan Investment Securities has effectively eliminated its related risk exposure. A representative from Shinhan stated, "We sold all our holdings of JTBC bonds through institutions, and there are no amounts sold to individual investors." Mirae Asset Securities also confirmed that it has no history of selling JTBC bonds to individuals or institutions.
KB Securities, Hana Securities, and Samsung Securities have been confirmed to have no direct exposure to Jungang Group. Korea Investment Securities did not participate in the creditor group and has no amounts sold to individual investors. Kyobo Securities is also reported to have no related exposure.
An industry insider remarked, "It is essential to consider not just the size of the exposure but also the actual recovery potential and collateral structure. The speed of debt recovery and repayment rates during the rehabilitation process will be critical variables."
* This article has been translated by AI.
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