The Korea Technology Finance Corporation announced on the 16th that it has issued new bond collateralized securities (P-CBO) worth 287.3 billion won in the first half of this year to enable technology SMEs to raise funds through the direct finance market.
P-CBO is a type of asset-backed security issued by a special purpose company (SPC) after acquiring newly issued corporate bonds from small and medium-sized enterprises that find it difficult to finance through their own credit. The Korea Technology Finance Corporation provides guarantees for the debt that the SPC assumes to enhance creditworthiness and supports technology SMEs in smoothly raising long-term funds in the direct finance market.
According to the Korea Technology Finance Corporation, through this issuance, a total of 287.3 billion won was newly raised by 113 technology SMEs that are struggling amid economic uncertainties and a recession, with a fixed interest rate for a 3-year maturity. Additionally, in response to the recent proactive demand for funds from corporations, the scale of new issuances this year has increased by 70.1 billion won compared to the same period last year, and the number of companies has increased by 16.
In particular, the Korea Technology Finance Corporation issued 44.5 billion won of green asset-backed securities (G-ABS) to support 18 corporations engaged in businesses that comply with the Korean green classification system (K-Taxonomy). Based on this, it facilitated funding for green economy activities and is evaluated to have contributed to the implementation of carbon neutrality goals through the activation of green investments.
Green asset-backed securities are products introduced in cooperation with the Ministry of Environment and Korea Environmental Industry and Technology Institute to promote green economy activation. Last year, they provided a maximum subsidy of 4.0 percentage points for one year per corporation and a 0.2 percentage point interest rate reduction benefit for three years. This year, the subsidy period has been extended to three years, supporting a maximum of 3.0 percentage points in the first year and around 50% of the subsidy amount from the first year in the second and third years, thereby significantly reducing the financial burden on green technology corporations. The Korea Technology Finance Corporation plans to issue more P-CBOs and G-ABS in the second half of the year.
Kim Jong-ho, chairman of the Korea Technology Finance Corporation, said, "As our economy faces major challenges such as slowed growth and global technological hegemony competition, the Korea Technology Finance Corporation will take the lead in supporting technology SMEs to overcome liquidity crises and secure technological competitiveness." He noted, "We will actively respond to the government's policies for economic recovery, fair growth, and the transition to eco-friendly renewable energy, and enhance policy finance support by expanding cooperation with related organizations so that technology SMEs can raise funds at lower expenses."