SEOUL, September 30 (AJP) — South Korean companies raised 38 percent less from stock and bond sales in August than in July, as banks and other lenders sharply scaled back their borrowing in the bond market, the Financial Supervisory Service said Wednesday.
Companies raised 16.33 trillion won ($12 billion) last month, down from about 26.3 trillion won in July, according to the regulator. Bond sales made up 15.88 trillion won of the total and stock sales 454.9 billion won.
Financial companies drove most of the decline. Banks, financial holding companies and non-bank lenders sold 14.81 trillion won of bonds, down 32.2 percent from July and more than 90 percent of all bonds issued during the month.
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.
In all, bond sales fell 36.1 percent from July.
The August slump adds to a weak year. Stock and bond sales totaled 169.25 trillion won in the first eight months of 2026, down 14.4 percent from a year earlier, with stock sales down 50.4 percent and bond sales down 12.5 percent. August stock sales were 48.7 percent below a year earlier, and bond sales 14.8 percent lower.
Stock sales 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 selling 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 fell 88.8 percent to 310 billion won, and all of it went to refinance maturing debt rather than to fund operations or investment.
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.
Funding costs edged up. 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, according to Bank of Korea data.
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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