KT, E-mart warm up S.Korea's corporate bond market

South Korea's KT Corp. and E-mart Inc. are the frontrunners in the new year's corporate bond demand forecasts, attracting attention on if they can breathe life into a frozen market amid high interest rates.

Investment banking sources on Monday said KT and E-mart will begin their forecasts for corporate bond demand from Wednesday. With the nation's highest credit rating at the stable "AAA," KT seeks to issue two-, three- and five-year bonds worth a combined 150 billion won ($117.5 million) and is considering doubling the amount to 300 billion won.

The lead investors for KT's issuance are KB Securities, NH Investment and Securities, Korea Investment and Securities, Shinhan Investment and Securities, and Samsung Securities Co.

Korea's No. 1 hypermarket E-mart is promoting the issuance of two- and three-year bonds worth a cumulative 200 billion won. Armed with a stable “AA" rating, the company in April last year attracted orders of 870 billion won, nearly triple its demand forecast of 300 billion won. If its latest projection is successful, the amount will surge to 400 billion won.

The domestic corporate bond market seems to be gradually recovering since Lotte Engineering and Construction last month sold corporate bonds worth 250 billion won.

The sector expects favorable issuance results led by high-quality bonds. POSCO Holdings Inc. with a rating of "AA+," LG Uplus Corp. with "AA" and LG Chem Ltd. with "AA+" this month are expected to lead the market for corporate bond issuance through successful demand predictions.

Write to Hyun-Ju Jang at blacksea@hankyung.com