S. Korea's foreign-currency bond sales may decrease in 2010: brokerage report

SEOUL, Feb. 9 (Yonhap) -- South Korean companies may sell less foreign-currency
bonds this year as the government restricts overseas funding to curb gains in the
local currency, a local brokerage report showed Tuesday.
"Although US$20.1 billion of Korea papers come to maturity this year, the
issuance volume might be less than the last year due to government restrictions,"
Louis Shin, an analyst at Woori Investment & Securities Co. said in the report.
Shin said "the government appears to be limiting excess bond sales by state-run
companies in a bid to slow down a rise in the South Korean won's value and
inducing capital funding in the local financial market".
Private firms may also reduce issuance of foreign-currency bonds as they are
forecast to be able to raise funds at lower interest rates at home, the analyst
noted.
South Korean bond issuers sold a record amount of debts last year as global
investors bet on one of the world's fastest recovering economies, from the worst
crisis in more than a decade.
The nation's foreign-currency bond sales reached $26.3 billion in 2009, with its
net issuance coming in at $14.8 billion, according to the report.
Shin said two state-owned lenders -- the Korea Development Bank and the
Export-Import Bank of Korea -- may see $4.9 billion overseas debts come due in
2010 while $1.9 billion of bonds would mature for other non-banking companies run
by the state.
Local lenders may face a combined $7.2 billion debts maturing, the analyst said,
noting but they are expected to sell similar size of rolling-over and new bonds.
As for private companies, $2.9 billion of debts may come due in 2010, with Hynix
Semiconductor Inc. and Kia Motors Co. being predicted to raise funds in overseas
markets to make facility investment, according to the report.
pbr@yna.co.kr
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