One-third of Korean petrochem bonds incur valuation losses

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Korean institutional investors are sitting on a total of 10.6 trillion won worth of bonds sold in public by the six petrochemical products suppliers, which are among the country’s two largest corporate bond sellers, alongside telecom companies.“Institutional investors, pressed to deploy the annual inflows of retirement pension funds at the start of the year, have often opted to purchase their bonds at premiums, regardless of the sector's outlook,” said a bond portfolio manager.

WIDENING CREDIT SPREADSThe yield on Lotte Chemical’s three-year bonds, rated AA, were quoted at 3.54% as of Feb.21, according to three Korean credit rating agencies.That is 0.39 percentage points above the average of 3.15% for the other AA-rated domestic corporate bonds.

Despite warning signs of the industry downturn, petrochemical bonds have been heavily bought at premiums between 2019 and 2021," the bond portfolio manager added.

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Category: Economy

Markets: South KoreaChina

Topics: South Bonds 2019 Bond Korean Losses Companies Petrochemical Percentage Korea Points

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Published On: 2025-02-24 @ 17:51:54 (5 hours ago)

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Language: English

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