S. Korea's bond issuance falls 9.9 pct in June

SEOUL, July 5 (Yonhap) -- South Korea's bond issuance dropped nearly 10 percent in June from a month earlier due mainly to decreased debt sales by the central bank and policy lenders, the bourse operator said Tuesday. Bond issuance by the country's government, public institutions and companies reached 50.5 trillion won (US$47.4 billion) last month, down 9.9 percent from May, according to the Korea Exchange (KRX). The total amount of bonds issued in the fist half of the year came to 292.8 trillion won, it added. The comparable figure for the year-earlier period was unavailable since the KRX began compiling related data in May this year. The on-month decline came as the Bank of Korea (BOK) and state-run lender Industrial Bank of Korea reduced bond issuance, the KRX said. Monetary stabilization bonds issued by the BOK fell 22 percent from a month earlier, while policy lenders' issuance of financial bonds tumbled 50.3 percent. Corporate debt sales stayed nearly unchanged from the previous month, edging down 0.2 percent. The KRX, meanwhile, noted that dollar-denominated bond issuance plunged 75.3 percent to 133.5 billion won amid tightened regulations on "kimchi bonds." Kimchi bonds refer to foreign currency debt issued by local and foreign companies in South Korea. Excessive sales of kimchi bonds have been blamed as the main reason for rising short-term foreign debt, putting upward pressure on the local currency. In April, South Korean financial authorities inspected four banks -- one local and three foreign banks -- over currency forwards and their handling of kimchi bonds amid a surge in short-term overseas debt, which is feared to hurt market stability.