[Edaily Marketin, Reporter KIM YEON-SEO ] In September, securities firms are set to issue up to 1.3 trillion won in public corporate bonds. Despite rising market interest rates, forecasts suggest they will have no trouble securing investor demand, as institutional investors’ CARRY trade demand is flowing in, particularly for high-quality AA-rated securities bonds.

According to the investment banking (IB) industry on the 24th, DaishinSecurities (AA-), Hana Securities (AA0), DB Securities (A+), and NH INVESTMENT & SECURITIES (AA+) will conduct bookbuilding among institutional investors next month for the issuance of public corporate bonds. These securities firms aim to raise a total of 800 billion won, with plans to expand the issuance size to up to 1.3 trillion won depending on the results of the bookbuilding.

Hana Securities aims to raise a total of 300 billion won, comprising 150 billion won in 2-year bonds and 150 billion won in 3-year bonds. If the book-building process is successful, the company plans to increase the issuance amount to a maximum of 500 billion won. NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, and Shinhan Investment Securities are serving as lead underwriters. Book-building will take place on the 2nd of next month, with the bonds scheduled for issuance on the 10th.

NH INVESTMENT & SECURITIES is conducting a bookbuilding process for a total of 200 billion won, comprising 50 billion won in 2-year notes, 120 billion won in 3-year notes, and 30 billion won in 5-year notes. The maximum issuance limit is 300 billion won. Shinhan Investment Securities, SamsungSecurities, Hana Securities, and DaishinSecurities are serving as lead underwriters. Bookbuilding will take place on the 8th of next month, with the issuance scheduled for the 15th.

DaishinSecurities is raising a total of 150 billion won through 2-year and 3-year bonds. If institutional demand is sufficient, the company plans to increase the offering size to a maximum of 300 billion won. The lead underwriters are NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, Shinhan Investment Securities, and SamsungSecurities. The bookbuilding process will take place on the 1st of next month, with the issuance scheduled for the 10th.

DB Securities, rated A+, will also issue corporate bonds totaling 150 billion won, consisting of 70 billion won in 1.5-year bonds and 80 billion won in 3-year bonds. The company has left open the possibility of increasing the offering size to a maximum of 200 billion won. KB Securities and Shinhan Investment Securities are serving as lead underwriters. The target yield band has been set at –30 basis points (bps; 1 bp = 0.01 percentage point) to +30 bps relative to the average rating-based yield. The bookbuilding process is scheduled for the 2nd of next month, with the issuance set for the 10th.

Market observers believe there will be no significant difficulty in securing demand, given that the total number of issuing companies has decreased compared to last year and the issuance includes a high proportion of AA-rated high-quality securities bonds.

Choi Seong-jong, an analyst at NH INVESTMENT & SECURITIES, stated, “As bookbuilding for corporate bonds—which had been limited due to the seasonal off-peak period—resumes, the number of issuers has decreased compared to last year, so CARRY demand is expected to flow in, centered on high-quality companies.” He added, “Companies participating in bookbuilding are expected to secure funds stably.”

He continued, “As uncertainty surrounding monetary policy gradually eases, credit spreads are likely to narrow on the back of robust demand,” adding, “A hold-to-maturity strategy is effective, particularly for 2- to 3-year corporate bonds issued by companies with favorable business conditions.”