[Edaily Marketin KIM YEON-SEO Reporter] With corporate bond issuance resuming in earnest in September, all eyes are on whether the strong momentum seen in the bookbuilding market last week will continue this week. As securities firms and A-rated companies are turning to the public bond market one after another, market observers note that institutional investor demand is recovering, particularly for credit bonds, which have become more attractive due to higher absolute yields.

According to the investment banking (IB) industry on the 6th, in the corporate bond market this week (September 7–11), Daishin F&I (A+), Lotte Auto Lease (A+), NH INVESTMENT & SECURITIES (AA+), and KoreanAirLines (A0) will conduct bookbuilding among institutional investors for the issuance of public corporate bonds.

Daishin F&F will begin its bookbuilding for corporate bonds totaling 150 billion won on the 7th. By tranche (maturity), the issuance consists of 80 billion won in 2-year bonds and 70 billion won in 3-year bonds. Depending on institutional investor demand, the company plans to increase the issuance amount to a maximum of 300 billion won. The lead underwriters are NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, Shinhan Investment & Securities, and SamsungSecurities. Following the bookbuilding process, the bonds are scheduled to be issued on the 15th. The funds raised through this corporate bond issuance will be used to repay corporate commercial paper (CP) totaling 100 billion won and short-term bonds totaling 50 billion won.

On the same day, Lotte Auto Lease will also conduct a bookbuilding process. Lotte Auto Lease aims to raise a total of 30 billion won, consisting of 20 billion won in 1.5-year bonds and 10 billion won in 2-year bonds. Depending on the results of the bookbuilding, the company has left open the possibility of increasing the issuance amount to a maximum of 60 billion won. KB Securities, Shinhan Investment Securities, KIWOOM Securities, and MIRAE ASSET SECURITIES are serving as lead underwriters. The target yield band was set relatively wide at -40 to +40 basis points (bps; 1 bp = 0.01 percentage point) relative to the ratings provided by individual private bond rating agencies. The scheduled issuance date is the 15th. The company plans to use the funds raised through the corporate bond issuance to repay commercial paper (CP) maturing in September and October.

On the 8th, NH INVESTMENT & SECURITIES and KoreanAirLines will both tap the market. NH INVESTMENT & SECURITIES is conducting a bookbuilding process with a total target of 200 billion won. The offering consists of 50 billion won in 2-year bonds, 120 billion won in 3-year bonds, and 30 billion won in 5-year bonds, with the option to increase the issuance amount up to a maximum of 300 billion won. Shinhan Investment & Securities, SamsungSecurities, Hana Securities, and DaishinSecurities are participating as lead underwriters. Based on the results of the book-building process, the company plans to issue corporate bonds on the 15th.

KoreanAirLines plans to issue corporate bonds totaling up to 350 billion won, depending on the results of the bookbuilding process. If the company successfully increases the issuance amount to the maximum, it will have the largest issuance volume among companies conducting bookbuilding this week. The bonds will have maturities of 2 and 3 years. Seven securities firms—NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, KIWOOM Securities, SamsungSecurities, MIRAE ASSET SECURITIES, and HANWHA INVESTMENT & SECURITIES—are serving as lead underwriters. The company plans to conduct the bookbuilding on the 8th and issue the bonds on the 16th.

Market analysts note that investment demand is gradually picking up, particularly for credit bonds that offer attractive absolute yields, even amid ongoing domestic and international uncertainties. In fact, last week, Woori Financial F&I, DaishinSecurities, Hana Securities, COWAY, and DB Securities conducted bookbuilding for their corporate bonds, with most securing orders that significantly exceeded their target amounts. In particular, issuers—especially securities firms—filled their target amounts at “below-market rates,” which were lower than the individual average market rates, thereby reducing their funding costs.

Lee Hwa-jin, an analyst at HYUNDAI MOTOR SECURITIES, commented, “Corporate bond issuance has been on the rise since last week, and securities firms’ winning bid rates have been relatively strong.” He added, “Despite the JR GLOBAL REIT crisis, Hanwha REIT—a group-affiliated REIT—successfully issued bonds, and issues offering significant high-yield merits were relatively well received in the auctions.” She added, “Even amid unfavorable domestic and international conditions—such as escalating war tensions, rising oil prices, and domestic fiscal policy—demand for high-yield bonds is gradually recovering, continuing the trend from last week.”