This article appeared on "Signal," a capital markets compass, at 15:59 on July 15, 2026.
Korea Securities Finance Corporation will issue a foreign currency-denominated bond for the first time since its founding. The move aims to meet the growing demand for foreign currency as brokerages expand their overseas operations. Until now, brokerages could secure dollars either by issuing foreign currency bonds directly or by tapping foreign currency deposits held at Korea Securities Finance, but they will now gain access to a more stable foreign currency funding channel.
According to the investment banking (IB) industry on the 15th, Korea Securities Finance recently signed underwriting agreements with HSBC, JP Morgan, and Crédit Agricole and began preparations to issue a dollar-denominated bond. The issuance is targeted for the end of this month. The issuance size is expected to be set between $300 million and $500 million (approximately 450 billion to 750 billion won).
This marks the first time Korea Securities Finance has raised foreign currency directly, largely with the aim of supporting brokerages' foreign currency needs. As Korea's only securities finance company, Korea Securities Finance lends funds to brokerages and manages investor deposits. While it can supply foreign currency to brokerages using its foreign currency deposits, on-the-ground demand had not been significant. Because those funds eventually had to be returned to investors, they offered less stability.
As brokerages have recently raised foreign currency across the board, the view has spread that Korea Securities Finance should also establish itself as a stable source of foreign currency supply. This year, Mirae Asset Securities, Hana Securities, NH Investment & Securities, and Korea Investment & Securities have issued foreign currency bonds, and KB Securities is also coordinating its timing. In addition, if Korea Securities Finance, which holds a global credit rating (Aa2) on par with the government, issues foreign currency bonds directly to supply dollars, brokerages' own funding burden could be further eased. Some analysts also argue that foreign currency bonds issued by individual firms are insufficient to cover funding needs as brokerages' overseas businesses expand.
The variable is market supply and demand. Foreign currency bond issuance plans have concentrated in this month to avoid uncertainty stemming from the U.S. midterm elections in November. Led by the South Korean government, the Export-Import Bank of Korea, KT&G, KT, Korea Electric Power Corporation, and Korea East-West Power have completed their issuances, while NongHyup Bank and Hanwha Aerospace, among others, are also in the pipeline. "Given Korea Securities Finance's credit rating, it will secure sufficient investment demand despite being a debut issuance," an IB industry official said. "But because concerns over an oversupply of Korean Paper have recently emerged among overseas investors, there remains a possibility that order strength may not be as strong as expected."
