Korea credit markets flag amid lingering doubts about global economy

By Susanna Moon

Chicago, Aug. 19 - Korea's bond markets could be hurt throughout the third quarter by lingering uncertainties about subprime mortgage problems, according to a report by the Korea Development Bank in its KDB Journal.

Credit markets deteriorated amid soaring oil prices and ongoing housing concerns in the United States, the bank noted.

The summer vacation season in the third quarter also means a shorter window for issues. In Korea, issuers could see the pipeline grow fatter as many deals are delayed, the report said.

There, high-grade issuers are expected to pay a premium of 20 to 30 basis points over their own credit default swaps.

The pipeline for the third quarter is projected as follows:

• Hyundai Capital for 30 to 50 billion Japanese yen;

• National Agricultural Co-operative Federation for $500 million-plus;

• Pusan Bank for $200 million-plus;

• Korea Expressway for $500 million-plus;

• Korea Housing Finance Corp for $500 million-plus;

• Korea Western Power Co., Ltd. for $300 million-plus;

• Korea Water Resources Corp. for $300 million-plus;

• Export-Import Bank of Korea for $1 billion-plus;

• Republic of Korea for $1 billion-plus;

• Shinhan Bank for $500 million-plus;

• Hana Bank for $500 million-plus.

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