SEOUL, March 19 (Xinhua) -- Bipolarization in the South Korean corporate debt-financing market continued last month, boosting concerns over credit crunch among small, low-credit companies.
Large corporations raised 3.93 trillion won (3.55 billion U.S. dollars) through bond sales in February, while there was no debt issuance by small companies, according to the Financial Supervisory Service (FSS).
Corporate bonds issued by big companies were up 46.3 percent from a month earlier amid low borrowing costs, while small firms failed to raise capital through debt issuance for two straight months. South Korea's central bank kept its policy rate on hold at 2.75 percent for five straight months.
Bonds sold by companies with a credit rating of over 'A' accounted for 96.6 percent of the total, indicating firms with low credit were struggling to raise capital in the debt-financing market.
Debt financing among small firms with low credit has faltered since Kukdong Engineering & Construction, a midsize builder, surprisingly filed for court receivership in September 2012.
Equity financing market, including rights offering and initial public offering (IPO), still failed to recover to the right track. There were four IPOs worth 97.4 billion won (88 million U.S. dollars) and three rights offerings valued at 155.5 billion won each in February.