| Headline: Cooperate or be damned Source: Euromoney Date: February 2001 Author: Chris Cockerill The government may have successfully strong-armed a union out of the way, but it’s having a little more difficulty twisting the arm of Korea First Bank. And the government, not for the first time, has ended up with a bit of mud on its face. It’s come up with a plan to kick-start the moribund corporate bond market. And it was counting on the support of the local banks to help out. However, the government is learning that in the new marketplace where shareholder value plays a more significant role it’s not always possible to get what you want. No matter how hard you stamp your foot.
Over half of the corporate bonds are below investment grade and the secondary market is dead. 75% aren’t trading. And there is a rather large problem looming with $25billion worth of bonds maturing over the coming few months. The government’s plan revolves around Korean Development Bank initiating an 80% buy-back of corporate bonds from companies that are having problems servicing their debts. | ||||||||||||||||||||||||||||||||||||||||||