South Korean retail giant Lotte Group has sold the most debt so far this year with other major business groups also offering massive corporate debt amid low market rates, data showed on Saturday.
According to the data compiled by Infomax, the financial news and information arm of Yonhap News Agency, Lotte affiliates have sold a combined 3.58 trillion won (US$3.13 billion) this year as of Friday, followed by energy and telecom conglomerate SK with 3.13 trillion won, tech giant LG Group with 2.72 trillion won, Hyundai Motor Group with 1.76 trillion won, and heavy machinery conglomerate Doosan with 1.73 trillion won.
Leading Lotte's debt offering was Lotte Shopping Co., which sold a total of 960 billion won worth of corporate debt through Friday this year. Hotel Lotte also raised 750 billion won by selling debt, followed by Lotte Rental with 590 billion won and Lotte Chilsung Beverage with 400 billion won.
A huge chunk of the proceeds from the debt sale by Lotte affiliates were used to repay or refinance debt, according to the data.
Lotte affiliates have some 660 billion won in debt due during the second half of the year.
SK Corp., the de facto holding firm of the group, floated 1.1 trillion won worth of debt, followed by No.1 mobile carrier SK Telecom Co. with 370 billion won, SK Incheon Petrochem with 300 billion won, and SK E&S with 250 billion won, the data showed.
Analysts said more firms are expected to tap the local debt market to refinance maturing debts to capitalize on low interest rates.
"Given that demand for corporate bonds runs high, more firms are likely to seek to sell debts during the remainder of the year," said Kim Min-jung, an analyst at Hanwha Investment & Securities. (Yonhap)