Korea Pledges Market Aid as Builder Asks to Reschedule Debt
- Taeyoung more exposed to project financing than peers
- Shares swing wildly, price of 2024 won bond sinks 28%
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South Korea sought to reassure investors after Taeyoung Engineering & Construction Co. asked for its debts to be reorganized, reigniting concerns about the type of asset-backed security that triggered a credit crunch in the country last year.
The financial regulator said on Thursday it would expand refinancing support for corporate bonds and commercial paper issued by construction companies, as well as a program allowing small and medium-sized companies to raise funds via debt capital markets. That’s a bid to avoid a repeat of 2022, when the government was forced to intervene to forestall a full-blown crisis after the default of a developer triggered a spike in firms’ borrowing costs.