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Troubled sectors' maturing bonds top 2.9 tln won through Oct.

All Headlines 10:38 August 08, 2013

SEOUL, Aug. 8 (Yonhap) -- South Korea's builders, shipbuilders, and shippers have to repay maturing bonds worth 2.9 trillion won (US$2.6 billion) through October 2013, data showed Thursday, raising woes over their financial health.

The figure accounts for 72.2 percent of their combined maturing debts of 4.02 trillion won in the second half.

Local builders' maturing debts came to 2.3 trillion won through October, trailed by shippers with 280 billion won and shipbuilders with 250 billion won, the industry data showed.

The three sectors in South Korea have emerged as the most vulnerable, according to many experts here and abroad, as they have been suffering from the economic downturn, with their profits crimping amid faltering demand.

Market watchers said October will become a watershed moment for local builders as they will have to repay maturing bonds worth 1.1 trillion won, amid the rising economic uncertainties that make it harder for them to bear the burden.

The South Korean government, meanwhile, rolled out a set of measures last month to have state-run financial institutions buy the bonds issued by local firms so that the companies could face less risk in refinancing to repay their debts.

In order to do so, the government will assign state-run Korea Development Bank to purchase corporate bonds, with which it will issue the so-called primary-collateralized bond obligations (P-CBOs), a type of a structured financial instrument, and sell them to institutional investors.

The government said the measures are intended to help the three ailing industries raise necessary funds at a time of sustained jitters stemming from the global downturn.


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