S. Korea’s dollar bond deals reach $15 bln

South Korean companies have issued over $15 billion worth of bonds since January 1, a 30 per cent increase from the same period in 2023, as investors seek alternatives due to lack of Chinese bond offerings, Reuters cited LSEG data on Tuesday.

The companies have issued a record amount of dollar bonds to secure funding for overseas expansion plans. This surge has exceeded expectations driven by a positive investor sentiment towards Korea.

The expectation of higher interest rates led some Korean companies to delay deals in 2023, but upcoming funding needs have revived these transactions this year, bankers said.

Meanwhile, China’s offshore bond deals have declined significantly due to the ongoing crisis in its real estate sector and the lingering effects of the pandemic on its economy.

It is noteworthy that SK Hynix, the world’s second-largest memory chip maker, raised $1.5 billion in a two-tranche deal last month, receiving orders worth $6.5 billion.

Korean deals accounted for 44 per cent of dollar bonds issued across the Asian region, excluding Japan and Australia, where the value of transactions is down 10 per cent year to date, LSEG data said.