South Korea's listed companies have almost doubled their issuance of convertible bonds (CBs) this year amid financial troubles largely attributable to corporate restructuring and lower profitability, data showed Monday.
The volume of CBs sold by firms listed on the main KOSPI and secondary KOSDAQ markets in the first 11 months of 2016 totaled 5.03 trillion won ($4.3 billion), up 94.3 percent from a year earlier, according to the Korea Exchange.
A image of corporate bond yields (Yonhap)
CBs issued by KOSPI-listed firms grew 82.1 percent to 1.8 trillion won and those by KOSDAQ ones jumped 101.8 percent to 3.3 trillion won, added the Seoul bourse.
CBs give bondholders the option to convert them into common shares after a given period.
Market watchers said firms, especially with relatively low credit ratings, sought to raise funds via the increased sale of CBs, as bond yields have soared recently partly on the election of Donald Trump in the United States.
The combined amount of bonds with warrants (BWs), issued during the period, also climbed 72.4 percent on-year to 524.5 billion won.
BWs offer holders a chance to buy shares in the issuing company at a guaranteed price. (Yonhap)
