[Edaily Marketin Reporter KIM YEON-SEO ] In the corporate bond market during the first week of November, bookbuilding is scheduled for approximately 1 trillion won worth of bonds, including general corporate bonds and capital securities. Attention is focused on whether these issuances will attract sufficient investor demand, as high-credit-rated issuers—including Korea Investment & Securities, POSCO FUTURE M, HANWHA LIFE INSURANCE, and KB Financial Group—are entering the market one after another.

According to the investment banking (IB) industry on the 1st, HANWHA INVESTMENT & SECURITIES and POSCO FUTURE M will conduct bookbuilding for corporate bonds in the corporate bond issuance market this week (November 2–6). HANWHA LIFE INSURANCE plans to conduct bookbuilding for subordinated bonds, while KB Financial Group plans to do so for the issuance of hybrid capital securities.

Korea Investment & Securities (AA0) will conduct a bookbuilding process on the 3rd for corporate bonds totaling 300 billion won. The tranches (maturities) consist of 170 billion won in 2-year bonds and 130 billion won in 3-year bonds. Depending on the results of the bookbuilding, the company plans to consider increasing the issuance amount to a maximum of 500 billion won. The target yield band has been set at –30 basis points (1 bp = 0.01 percentage point) to +30 basis points relative to the individual market average yield. Shinhan Investment Securities, Hana Securities, and KIWOOM Securities are serving as lead underwriters. The corporate bonds are scheduled to be issued on the 10th of this month.

On the same day, HANWHA LIFE INSURANCE (AA+) will conduct a bookbuilding process for 400 billion won in subordinated bonds. The bonds have a 10-year maturity and include a call option exercisable after five years. The target yield range is 4.8% to 5.3% per annum, and the company is considering increasing the issuance size to up to 800 billion won. The lead underwriters are NH INVESTMENT & SECURITIES, KB SECURITIES, and Korea Investment & Securities. The scheduled issuance date is the 11th.

POSCO FUTURE M (AA-) will conduct a bookbuilding process on the 4th for corporate bonds totaling 100 billion won. The issuance consists of 2-year and 3-year tranches, with the target yield band set at -30 basis points to +30 basis points relative to the individual market average yield. The company may increase the issuance amount to a maximum of 200 billion won. The lead underwriters are NH INVESTMENT & SECURITIES, KB Securities, Korea Investment & Securities, KIWOOM Securities, and SamsungSecurities.

On the same day, KB Financial Group (AA-) will also conduct a bookbuilding process for 270 billion won in hybrid capital securities. The securities have a maturity of 99 years and include a call option exercisable after five years. Depending on the results of the bookbuilding, the company will consider increasing the issuance amount to a maximum of 400 billion won. The lead underwriters are KIWOOM Securities and Hana Securities, and the scheduled issuance date is the 12th.

Amid continued fundraising by high-quality issuers, forecasts suggest that credit spreads will remain at high levels next year as well. Analysts note that if bond supply increases during a period of rising interest rates, it could put significant pressure on the credit market’s supply-demand balance.

Kim Sang-man, an analyst at Hana Securities, stated, “In past periods of rising interest rates, an increase in bond supply has had a negative impact on credit spreads.” He added, “While we may see a ‘start-of-the-year effect’ or phase-specific narrowing trends, it is highly likely that credit spreads will remain at high levels or widen further next year.”