South Korea's Lower-Grade Corporate Bond Yields Hit Record on Rate Hikes, Funding Crisis Deepens

According to Financial Investment Association data, as of July 16, South Korean lower-grade corporate bond yields hit record highs amid interest rate hikes and weakened institutional demand. BBB-rated 3-year bonds reached 10.345%, up 104.2 basis points since early 2026, while AA-minus-rated bonds hit 4.544%, up 108.5 basis points year-to-date. The surge is complicating fundraising for lower-grade companies; Hanjin's 40 billion won bond offering on July 14 received only 19 billion won in bids, leaving 1 billion won unsold, while Donghwa Enterprise's 40 billion won offering in May received no bids at all.
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