S. Korea's direct financing climbs in March

SEOUL, April 22 (Yonhap) -- South Korean companies' direct financing increased 7.9 percent in March from the previous month, helped by a boost in debt sales, the financial regulator said Thursday.

Local companies raised a combined 10.81 trillion won (US$7.98 billion) by selling
shares and bonds last month, compared with 10.02 trillion won in February, the
Financial Supervisory Service (FSS) said.
In the first quarter, the companies raised a total of 30.84 trillion won in
direct financing, up 5.6 percent from the same period last year, according to the
regulator.
Equity financing in March suffered a massive setback as companies cut rights
offerings, but strong debt sales boosted total direct financing. Corporate stock
sales nosedived 53.4 percent on-month to 77.8 billion won while debt issuance by
companies and lenders expanded 9 percent to 10.73 trillion won.
A sharp increase in asset-backed securities (ABS) is responsible for the March
direct financing expansion, an official of the regulator said.
Local lenders sharply increased sales of securities backed by banks'
non-performing loans in a bid to ease cash strains faced by smaller firms after
rising default rates jacked up bad debts.
Total issuance of ABS spiked 338.1 percent to 3.71 trillion won last month, the
watchdog said.