ID :
30228
Fri, 11/14/2008 - 16:55
Auther :
Shortlink :
https://www.oananews.org//node/30228
The shortlink copeid
S. Korea to guarantee US$14 bln in bank foreign debts
(ATTN: ADDS more details about sale of Daewoo Shipbuilding from para 7)
SEOUL, Nov. 14 (Yonhap) -- South Korea's financial watchdog said Friday the government will guarantee the payment of US$14 billion in local banks' foreign debts in an effort to ease their dollar squeeze.
The amount covers foreign loans that South Korean banks borrowed in late October
or plan to bring in until June next year, the Financial Services Commission (FSC)
said. The figure equates to 14 percent of the government's promised debt
guarantee.
On Oct. 19, the government pledged to offer a three-year guarantee of up to
US$100 billion for foreign borrowing by local banks between late October and June
of next year.
Following the announcement, the watchdog received applications for foreign loans
to be guaranteed by the state.
"Local banks plan to make their own efforts to borrow overseas so that they do
not need to get the total state guarantee," the FSC said in a report to
lawmakers.
Local banks should reserve their future state-guaranteed borrowing from abroad to
roll over maturing foreign debts. Out of 18 commercial banks, 16 lenders plan to
receive the guarantee, the FSC said.
Meanwhile, Jun Kwang-woo, chairman of the FSC, told lawmakers that proceeds from
the stake sale of Daewoo Shipbuilding & Marine Engineering Co. would be used to
stabilize the financial markets.
Earlier in the day, South Korea's state-run Korea Development Bank (KDB) signed a
preliminary deal with Hanwha Group on the sale of a controlling stake in the
world's No. 3 shipbuilder. KDB and state asset manager Korea Asset Management
Corp., hold a combined 50.37 percent interest.
"The proceeds from the sale of the approximate 30 percent interest held by KDB
may be used for possible restructuring in the financial sector if deemed
necessary," Jun added.
He also expected that the country's state pension fund will likely contribute
significantly to a 10 trillion won (US$7.2 billion) fund to stabilize the bond
markets.
The FSC said Thursday that it plans to set up a fund into which existing
institutional bond investors, such as banks and the state pension fund, would
pool money. The fund will be used to buy a wide range of bonds like corporate
debts, but only those with a certain credit rating level.
sooyeon@yna.co.kr
(END)
SEOUL, Nov. 14 (Yonhap) -- South Korea's financial watchdog said Friday the government will guarantee the payment of US$14 billion in local banks' foreign debts in an effort to ease their dollar squeeze.
The amount covers foreign loans that South Korean banks borrowed in late October
or plan to bring in until June next year, the Financial Services Commission (FSC)
said. The figure equates to 14 percent of the government's promised debt
guarantee.
On Oct. 19, the government pledged to offer a three-year guarantee of up to
US$100 billion for foreign borrowing by local banks between late October and June
of next year.
Following the announcement, the watchdog received applications for foreign loans
to be guaranteed by the state.
"Local banks plan to make their own efforts to borrow overseas so that they do
not need to get the total state guarantee," the FSC said in a report to
lawmakers.
Local banks should reserve their future state-guaranteed borrowing from abroad to
roll over maturing foreign debts. Out of 18 commercial banks, 16 lenders plan to
receive the guarantee, the FSC said.
Meanwhile, Jun Kwang-woo, chairman of the FSC, told lawmakers that proceeds from
the stake sale of Daewoo Shipbuilding & Marine Engineering Co. would be used to
stabilize the financial markets.
Earlier in the day, South Korea's state-run Korea Development Bank (KDB) signed a
preliminary deal with Hanwha Group on the sale of a controlling stake in the
world's No. 3 shipbuilder. KDB and state asset manager Korea Asset Management
Corp., hold a combined 50.37 percent interest.
"The proceeds from the sale of the approximate 30 percent interest held by KDB
may be used for possible restructuring in the financial sector if deemed
necessary," Jun added.
He also expected that the country's state pension fund will likely contribute
significantly to a 10 trillion won (US$7.2 billion) fund to stabilize the bond
markets.
The FSC said Thursday that it plans to set up a fund into which existing
institutional bond investors, such as banks and the state pension fund, would
pool money. The fund will be used to buy a wide range of bonds like corporate
debts, but only those with a certain credit rating level.
sooyeon@yna.co.kr
(END)
