Korea 3Y corporate bond yield falls 1.2 bps to 2.909%

Korea 3Y corporate bond yield falls 1.2 bps to 2.909%

The 3-year corporate bond yield in South Korea has decreased by 1.2 basis points to 2.909%, according to recent data. This drop in yield is a reflection of the ongoing market dynamics and investor sentiment.

The decline in the 3-year corporate bond yield comes amid a period of increased corporate direct financing in South Korea. According to the Financial Supervisory Service, corporate bond sales surged by 42.5% in April 2025, reaching 30.43 trillion won [2]. This surge in bond sales indicates a strong appetite for debt financing among local companies, likely driven by increased uncertainties stemming from US tariffs.

Furthermore, the value of outstanding corporate bonds stood at 713.69 trillion won as of end-April 2025, up 9.02 trillion won from a month earlier [2]. This growth in the outstanding bond value suggests a robust demand for corporate debt instruments.

The decrease in the 3-year corporate bond yield is also influenced by the broader economic context. South Korean companies are actively seeking to raise funds through various means, including bonds and equities. For instance, companies under the LG Group scrambled to sell shares and bonds to raise 4 trillion won ($2.8 billion) in February 2025 [5].

The trend of lower yields and increased bond sales is likely to continue, given the current economic environment and the need for companies to secure funding. Investors should monitor these trends closely to assess potential opportunities and risks in the South Korean corporate bond market.

References:
[1] https://www.kedglobal.com/newsList/ked003002000
[2] https://www.koreaherald.com/article/10491092