Bond issuance in South Korea shrank 11.5 percent in May from the previous month amid strong foreign buying, data showed Thursday.

The value of bonds sold in Asia's fourth-largest economy came to 73.3 trillion won ($65.7 billion) last month, down 9.6 trillion won from a month earlier, according to the data from the Korea Financial Investment Association.

Last month's drop represents a drastic turnaround from an on-month increase of 9.3 trillion won in April.

Sales of corporate bonds plunged by 7.8 trillion won on-month to some 7.9 trillion won, with the issuance of currency stabilization and other state bonds decreasing by 2.9 trillion won to 23.1 trillion won.

Sales of special bonds rose by 370 billion won to 11.6 trillion won, while sales of environment, social and governance (ESG) bonds declined by 2.2 trillion won to 9.1 trillion won.

ESG bonds are a type of sustainability debt offering aimed at financing corporate activities in environmentally friendly and sustainable projects.

Foreign investors bought a net 15.7 trillion won worth of South Korean bonds in May, with their holdings of local bonds climbing by 5.1 trillion won to an all-time high of 179.1 trillion won.

As of end-May, the value of outstanding bonds in the country stood at 2,387.4 trillion won, up 21.1 trillion won from the previous month. (Yonhap)