South Korea’s public and investment-grade companies rushed to the debt market last month to capitalize on the ample liquidity before interest rates go up further from additional tightening by the U.S. central bank.

New pipeline surged nearly 30 percent from a year-ago period in May to reach 4.83 trillion won ($4.3 billion), according to data compiled by Ray The M of Maeil Business Newspaper on Thursday. The issues exceeded original scope of 3.94 trillion due to heated demand.

Order books stretched to 8.05 trillion won in book-building as the issuers were mostly quasi public and top investment-grade names such as Korea Western Power, Korea Midland Power, LG Chem and Hotel Shilla.

LG Chem returning to the local debt market for the first time in five years drew record demand for its new offering of 500 billion won. It extended the scale to 800 billion won as demand reached 1.77 trillion won.

Dongbu Fire & Marine Insurance and Hyundai Marine & Fire Insurance attracted 1.16 trillion won worth of orders combined for their subordinated issues of 400 billion won and 300 billion won, respectively.

Hanwha Chemical doubled its offering to 100 billion won from initial scale of 50 billion won as subscription bulged to 472 billion won.

Of May issues, AAA papers made up 24 percent, AA grades 43 percent, A category 24 percent, and BBB levels 10 percent.

Heated demand for Korean debt spilled over to A or lower investment grade papers.

Kolon Industries (A), Hanwha Chemical (A+), Daelim Industrial (A+), Lotte Fine Chemical (A+) and Kumho Petrochemical bumped up their offering due to strong-than-expected demand.

Corporate bonds sales increased 30.5 percent on year to 22.57 trillion won in the first five months of the year.

By Park Yoon-gu

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]