KDB to use half of its bond buying fund in April

SEOUL, April 6 (Yonhap) -- The state-run Korea Development Bank (KDB) said Monday it expects to use nearly half of its 1.9 trillion-won (US$1.54 billion) corporate bond purchase program in April.

The estimate is based on a recent survey of corporate bonds that mature in April, including those issued by high-rated companies, such as major liquor maker Hite Jinro Co. and defense contractor Poongsan Corp., it said.

The state lender put the bond buying program in place this month to help struggling companies refinance their maturing bonds amid a credit crunch caused by the outbreak of the novel coronavirus.

Bank officials said companies with a credit rating of A or higher will be eligible for the refinancing program. Refinancing refers to corporate repayments of maturing bonds with newly issued bonds on the expiration date.

The development lender also said about half the 2 trillion-won corporate commercial paper purchase program, jointly run by the state-run Industrial Bank of Korea, will likely be spent this month. The KDB is responsible for 1.5 trillion won of the fund.

In late March, South Korea unveiled measures to help stabilize financial markets roiled by the spread of the new coronavirus, including a bond market stabilization fund worth 20 trillion won.

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