이 기사는 2020년 03월 04일 08:00 thebell 에 표출된 기사입니다.

Markets’ concerns on South Korea have increased due to the spread of the coronavirus disease in the country. Market watchers are paying attention to the disease’s impact on the Korean paper market which aims at global institutional investors.

Korea Resources Corporation (KORES) has delayed its planned issuance of kangaroo bonds due to an unfavorable market environment after an outbreak of coronavirus. The state-run company originally planned to hold its pricing process to issue kangaroo bonds - debt denominated in Australian dollars and issued by offshore firms in the Australian market - on February 24 or 25, but suspended the offering as global virus scare has dampened investor sentiment.

As more countries restrict travel to and from South Korea, issuers who have planned their debt offerings after KORES have come under more pressure. It has become impossible for the issuers to hold global roadshows which is a normal procedure taken by issuers before selling Korean paper. Related industries are preparing for non-face-to-face ways to attract global institutions such as conference calls, but a decrease in marketing activities seems inevitable.

However, the impact on issuers is likely to be limited in the short term due partly to the 135-day rule by the U.S. Securities and Exchange Commission (SEC), which mandates that the offering must take place within 135 days from the balance sheet date in an offering circular and registration statement. Issuance activities of Korean paper have been somewhat subdued since mid-February. In fact, KORES was the only issuer aiming to hold its pricing process at the end of February.

A prolonged coronavirus outbreak can dampen Korean paper market as well. Korea National Oil Corporation and Shinhan Bank plan to issue debts around April.

Issuers who have sold Korean paper continuously are expected to have relatively limited pressure. South Korea’s state-run lenders, commercial banks and some state-owned companies have raised their profile by constantly selling foreign currency-denominated bonds, which will make them attract demand smoothly without holding roadshows.

Issuers who have had shallow relationships with global investors are likely to be in trouble. Given that domestic insurance companies have started to resume issuance of foreign currency securities thanks to falling market interest rates, the impact of the disease can be more severe than expected.

(By reporter Pi Hye-rim)