Bonds issued by domestic construction companies fell to the lowest level in five years. According to data compiled by financial information service provider, Yonhap Infomax, Wednesday, cumulative bond issuances by builders stood at only 541 billion won ($426 million) this year.
With increased external and internal economic uncertainties, corporations have opted for survival as their top priority over considerations of economic, social and governance factors - ESG principles - in their management strategies. As a result, the weight of ESG bonds issued by corporations aiming to achieve environmental, social or governance improvements with the raised capital has been significantly reduced this year.
A persistent liquidity crunch at Lotte Group s construction unit prompted Korea s fifth-largest conglomerate to pour over 1 trillion won ($750 million) into Lotte E&C over the past month, despite a worsening credit outlook for other affiliates. In addition to fundraising from the group s affiliates and loans from banks, Lotte Group Chairman Shin Dong-bin s personal assets were even used to rescue the cash-strapped builder.
A persistent liquidity crunch at Lotte Group s construction unit prompted Korea s fifth-largest conglomerate to pour over 1 trillion won ($750 million) into Lotte E&C over the past month, despite a worsening credit outlook for other affiliates. In addition to fundraising from the group s affiliates and loans from banks, Lotte Group Chairman Shin Dong-bin s personal assets were even used to rescue the cash-strapped builder.
Lotte Group s affiliates poured a combined 1 trillion won ($733 million) over the past three weeks into the group s construction unit, which has faced financial risks stemming from worsening investor sentiment amid interest rate hikes and a default in project financing for the construction of the Legoland Korea Resort in Gangwon Province. Concerns have therefore grown further over the possibility of the builder s liquidity crisis threatening Lotte s group-wide financial soundness.