SEOUL, Oct. 28 (Xinhua) -- Corporate bond sales in South Korea jumped last month as companies rushed to sell debts amid lower rates following the delayed tapering of the U.S. Federal Reserve' s monthly bond purchases, data by the financial watchdog showed Monday.
Combined debt financing, including sales of corporate bonds, bank debentures and asset-backed securities (ABS), increased 23.4 percent from a month earlier to 10.75 trillion won (10 billion U.S. dollars) in September, according to the Financial Supervisory Service (FSS).
The increase came as the Fed decided last month to maintain its monthly bond purchases worth 85 billion dollars, leading to lower borrowing costs and consequent rush for issuing bonds by local firms. Market players expected the Fed to scale back the quantitative easing in September.
Corporate bond sales, or those issued by industrial companies, soared 89.4 percent on-month to 5.38 trillion won in September, the highest in five months. Bond issuance by financial companies reduced 11.6 percent last month, but bank debenture sales jumped 40.2 percent.
Bipolarization in the debt-financing market lasted. Bond sales by large corporations reached 5.38 trillion won last month, but there was no issuance by small firms.
Bonds issued by companies with a credit rating of "A" or above accounted for 95.9 percent of the total last month, implying that firms with low credit were struggling to raise capital in the debt market.
Meanwhile, equity financing such as rights offering and initial public offering (IPO) decreased 13.3 percent from a month earlier to 76 billion won in September. Rights offering reduced 70 percent on-month to 26.3 billion won in September, and there were three IPOs worth 49.7 billion won last month.