SK hynix Turns to Long-Term CP as New Investment Outlet

This article appeared on the capital markets compass "Signal" on July 13, 2026, at 3:57 p.m.

SK hynix (000660.KS) has chosen long-term commercial paper (CP) as a new investment outlet for its massive semiconductor cash pile. The instrument is seen as a preferred destination because it satisfies demand for financial products with longer maturities while offering simplified procedures. After recently deploying funds one after another into long-term CP issued by Mirae Asset Securities (006800.KS) and Woori Card, other financial institutions have judged this an opportune time to raise funds on favorable terms and are successively reviewing related products.

According to the investment banking (IB) industry on the 13th, Woori Card decided to issue 320 billion won worth of CP on the 16th of this month. The issuance consists of 210 billion won maturing on October 10, 2028, and 110 billion won set to mature on January 10, 2029. With Bookook Securities serving as lead underwriter, SK hynix decided to purchase the entire CP issuance. SK hynix also bought about 250 billion won of card bonds issued by Woori Card last month.

The market has taken note that SK hynix's investment scope has recently been narrowing toward long-term CP. Last month, it decided to invest about 1.26 trillion won in long-term CP issued by Mirae Asset Securities. An IB industry official explained, "The structure is one in which relationship managers (RMs) at the financial products divisions of securities firms entrusted with fund management submit investment proposals, and SK hynix makes the final decision. They are frequently proposing CP investments with maturities of more than one year, and the company is actively adopting them."

SK hynix's expansion of long-term CP investment is interpreted as the result of both funding convenience and the needs of issuers. CP has simpler issuance procedures than corporate bonds or specialized credit finance bonds, allowing funds to be deployed quickly. Because long-term market rates have surged compared with the start of the year, issuers have a strong incentive to raise funds in the form of long-term CP, which carries a relatively lower cost burden. In fact, the discount rate (interest rate) on the long-term CP issued by Woori Card is 4.04%, lower than the fair-value rate on two-year card bonds (4.37%) as of the 3rd of this month.

As a result, securities firms in urgent need of funding are successively reviewing long-term CP products to attract SK hynix's capital. This year, securities firms increased issuance of electronic short-term bonds and CP to respond to hedging demand from the launch of single-stock leverage products and rising margin requirements. In early last month, the average issuance rate of the top five firms by outstanding electronic short-term bond and CP issuance jumped from the low 3.0% range to around 4.5%. This means that gradual maturity extension along with low-cost refinancing is urgently needed.

In particular, as Mirae Asset Securities became the first securities firm to successfully issue long-term CP tailored to SK hynix, follow-up attempts are expected to follow. Another IB industry official explained, "With short-term funding rates having also risen sharply, securities firms have a strong incentive to attract SK hynix's semiconductor cash. We understand that other securities firms are also preparing measures to draw in SK hynix funds in the form of long-term CP."