The Ministry of SMEs and Startups and the Korea SMEs and Startups Agency (KOSME) announced on the 30th that they supported the issuance of corporate bonds worth 200 billion won for 80 promising medium-sized corporations through the 'scale-up finance (P-CBO).'
Scale-up finance is a program that supports medium-sized corporations that find it challenging to issue corporate bonds with their own credit to raise funds. The Ministry of SMEs and Startups and KOSME support this initiative to help outstanding medium-sized corporations advance into the next stage, including in areas of innovative growth and ultra-gap/new industries.
Among the corporations that received scale-up finance support from 2019 to 2021 and had matured, 25 achieved sales of 100 billion won. Eleven of these corporations also succeeded in initial public offerings (IPOs).
Corporations can structure the corporate bonds issued through scale-up finance into asset-backed securities (P-CBO) and sell them to private investors and KOSME to secure funds. The participation of private investors in purchasing asset-backed securities supplies more than three times the amount of government financial input, encouraging the expansion of corporation sizes.
The corporations supported by this scale-up finance reported an average annual revenue of 6.34 billion won, an average of about 70 employees, and an average age of 19 years. The issuance scale per corporation averages about 2.5 billion won, with corporate bond issuance rates varying by credit rating.
Kang Seok-jin, head of KOSME, noted, 'Scale-up finance is a program that supports large-scale fund raising for medium-sized corporations that find it difficult to issue corporate bonds with their own credit.' He added, 'This year, we will especially assist medium-sized corporations in their leap to become leading global companies.'