ID :
19154
Fri, 09/12/2008 - 11:47
Auther :
Shortlink :
http://m.oananews.org//node/19154
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S. Korea delays bond sale due to credit crunch abroad: official
NEW YORK, Sept. 11 (Yonhap) -- South Korea has decided to postpone indefinitely its plan to sell US$1 billion worth of sovereign bonds abroad as the financial crunch worsened in the international market due to the resurging liquidity problems of investment bank Lehman Brothers, a South Korean official said Thursday.
"We've decided to delay the sale as we are no longer in desperate need of
(money) foreign supply exchange," Deputy Finance Minister Shin Je-yun told
reporters. "Investors' response is that they are forced to demand higher
rates due to worsening market conditions here, although they feel like purchasing
South Korean sovereign debts because of South Korea's economic situation, which
is good enough."
South Korea held "road shows" to sell Korean sovereign bonds in London,
Boston, Singapore, Hong Kong and New York over the past days in the hope that any
successful sale might quell concerns over South Korea's financial market, which
has been rocked by rumors of an imminent mass exodus of foreign capital.
South Korea's stock and currency markets escaped chaos despite most bonds that
mature this month having matured on Tuesday and Thursday, easing jitters created
by rumors of depleting foreign exchange reserves and a rising trade deficit.
Shin said foreign inverstors expressed understanding of South Korea's decision to
postpone the bond sale, which Seoul organized before the Lehman Brothers emerged
as a new woe for the international financial market.
"It seems money is in scant supply in the U.S. financial market due to an
aggravating liquidity crunch," he said. "Also, the North Korean issue
worked as a risk."
He was referring to the reports that North Korean leader Kim Jong-il underwent
heart surgery, adding further uncertainty to the political situation of the
Korean Peninsula amid another deadlock over multilateral talks on ending North
Korea's nuclear weapons.
The South Korean government will take measures to issue $1 billion won worth of
sovereign bonds as soon as the international financial market regains strength,
another official said.
South Korea wanted to sell bonds at a spread of 200 basis points or lower over
U.S. Treasuries, but foreign investors asked for more than 210 basis points, he
said.
Any higher rate might have an adverse impact on South Korean financial
institutions and other companies seeking foreign investment, the official said,
insisting that the road shows, nonetheless, played a role in helping soothe
concerns over the soundness of South Korea's financial market.
"We've decided to delay the sale as we are no longer in desperate need of
(money) foreign supply exchange," Deputy Finance Minister Shin Je-yun told
reporters. "Investors' response is that they are forced to demand higher
rates due to worsening market conditions here, although they feel like purchasing
South Korean sovereign debts because of South Korea's economic situation, which
is good enough."
South Korea held "road shows" to sell Korean sovereign bonds in London,
Boston, Singapore, Hong Kong and New York over the past days in the hope that any
successful sale might quell concerns over South Korea's financial market, which
has been rocked by rumors of an imminent mass exodus of foreign capital.
South Korea's stock and currency markets escaped chaos despite most bonds that
mature this month having matured on Tuesday and Thursday, easing jitters created
by rumors of depleting foreign exchange reserves and a rising trade deficit.
Shin said foreign inverstors expressed understanding of South Korea's decision to
postpone the bond sale, which Seoul organized before the Lehman Brothers emerged
as a new woe for the international financial market.
"It seems money is in scant supply in the U.S. financial market due to an
aggravating liquidity crunch," he said. "Also, the North Korean issue
worked as a risk."
He was referring to the reports that North Korean leader Kim Jong-il underwent
heart surgery, adding further uncertainty to the political situation of the
Korean Peninsula amid another deadlock over multilateral talks on ending North
Korea's nuclear weapons.
The South Korean government will take measures to issue $1 billion won worth of
sovereign bonds as soon as the international financial market regains strength,
another official said.
South Korea wanted to sell bonds at a spread of 200 basis points or lower over
U.S. Treasuries, but foreign investors asked for more than 210 basis points, he
said.
Any higher rate might have an adverse impact on South Korean financial
institutions and other companies seeking foreign investment, the official said,
insisting that the road shows, nonetheless, played a role in helping soothe
concerns over the soundness of South Korea's financial market.
