▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issue Briefing]
■ Junk Bond Frenzy: More than $20 billion (about 27 trillion won) in demand poured into junk bonds, or speculative-grade debt, that SoftBank Group is issuing to fund its investment in OpenAI. The orders received in the book-building process far exceeded the initially planned size of $11 billion (15 trillion won). Yields were set at 8.75% to 8.875% for 3.5-year notes, 9.375% to 9.5% for 5.5-year notes and 9.75% to 9.875% for 7.5-year notes — all record highs among SoftBank's dollar-denominated bonds. Analysts attributed the investor interest to the record-high yields.
■ Short-Term Refinancing Alert: Short-term financial securities with less than 89 days remaining to maturity that come due this year totaled 268.34 trillion won. That accounts for 70.6% of the total outstanding issuance of 380.334 trillion won. With rate increases by major central banks gaining momentum and companies and non-bank financial institutions increasingly relying on shorter-term funding, some are calling for closer attention to refinancing risk. Concerns are being raised in particular that funding risk is growing among credit card companies.
■ Growth Outlook Raised: The Organisation for Economic Co-operation and Development put South Korea's growth forecast for this year at 3.7%, lifting it by 1.1 percentage points from its June projection of 2.6%. That is the largest upward revision among the Group of 20 economies, and compares with a March forecast of 1.7% — a 2 percentage point increase in six months. The OECD said strong export and production growth would lead the expansion this year. It also raised its forecast for this year's consumer inflation to 3.0% from 2.6%.
[News of Interest to Global Investors]
1. Yields of 8.75%: SoftBank Junk Bonds Draw 27 Trillion Won
- Key points: More than $20 billion flowed into the book-building for SoftBank Group's junk bonds, Bloomberg reported on the 22nd. The funding target was $10 billion in dollar-denominated debt and 1 billion euros in euro-denominated debt, and the 8.75% floor on the 3.5-year notes is close to the 8.5% average yield on B- rated bonds in the U.S. market. SoftBank is rated BB+ by S&P Global and Fitch, the highest rung below investment grade, and the terms were set well above the 6.55% average yield on BB-zone dollar bonds in Bloomberg's index. The proceeds will go toward a $65 billion investment in OpenAI and toward mergers and acquisitions.
2. 268 Trillion Won in Short-Term Debt Due This Year Raises Refinancing Risk
- Key points: Short-term financial securities maturing this year stood at 268.34 trillion won as of the 22nd, or 70.6% of total outstanding issuance, according to the Korea Securities Depository. Commercial paper, short-term bonds and asset-backed commercial paper coming due this month alone amounted to 181 trillion won, up 29.1% from 140 trillion won in September last year. Bank of Korea analysis showed the share of credit card bonds issued with maturities of two years or less expanded to 52.4% at the end of June this year from 3.6% at the end of June 2025, while credit card bonds maturing in the second half total 15.1 trillion won, above the 2020-2025 average of 10.5 trillion won. Market rates are climbing quickly as the European Central Bank, followed by the U.S. Federal Reserve and the Bank of Japan, raised policy rates in succession.
3. Chip Exports and Capital Spending Drive OECD's 2 Percentage Point Upgrade for Korea in Six Months
- Key points: The OECD on the 23rd put South Korea's growth forecast for this year at 3.7% and raised its projection for next year to 2.6% from 1.9%, an increase of 0.7 percentage point. The Asian Development Bank also raised its forecast for this year the same day, to 3.2% from 2.6%. Earlier, last month, the Korea Development Institute lifted its projection to 3.2% from 2.5% and the Bank of Korea to 3.3% from 2.6%. The OECD said the spread of artificial intelligence is supporting global investment, production and trade, and raised its forecast for global growth this year by 0.1 percentage point to 2.9%, while lowering its projection for next year by 0.1 percentage point to 3.0%.
[Reference News for Global Investors]
4. DeepSeek and Moonshot AI to Join U.N. Security Council Gathering
- Key points: Executives from global AI companies will gather at a U.N. Security Council session on "The Future of AI and International Security" in New York on the 23rd, Reuters reported. OpenAI Chief Executive Sam Altman, Anthropic CEO Dario Amodei and Hugging Face CEO Clement Delangue will attend, and China's DeepSeek and Moonshot AI have also been invited as speakers. DeepSeek founder Liang Wenfeng, known for staying out of public view, is considered unlikely to attend. Meanwhile, BYD, Xiaomi and battery maker Contemporary Amperex Technology are seen as likely to join a U.S.-China summit scheduled for the 24th, while no AI companies have been mentioned.
5. Huawei Narrows Gap With Apple to Three Years Using "Logic Folding" Without EUV
- Key points: Huawei's latest application processor, the Kirin 9050 Pro, outscored Apple's A17 Pro in a Geekbench 6 multicore test, according to the South China Morning Post in Hong Kong. The chip, believed to be mass-produced on a 7-nanometer-class process, was made using deep ultraviolet lithography instead of the extreme ultraviolet equipment that U.S. sanctions bar Huawei from using. U.S. investment research firm Bernstein assessed that the mobile chip technology gap between Huawei and Apple has narrowed to about three years from roughly four years in the previous generation. Still, performance remains about 30% behind Apple's 2-nanometer A20 Pro, the analysis found.
- Key points: The Ministry of Trade, Industry and Energy held the sixth resource security council meeting on the 23rd and finalized the first basic plan for resource security, which calls for cutting the Middle East's share of imported crude oil to 50% or less by 2035 from about 70% last year. With 61% of the country's imported crude passing through the Strait of Hormuz last year, the plan diversifies both supplier countries and shipping routes. The reimbursement rate for freight cost differentials on crude from the Americas, Europe and Africa will rise from about 25% to as much as 100% by the end of the year. The government will also add 13 items — including phosphorus, fluorite, germanium and 10 rare earth elements — to the list of critical minerals under supply chain management, bringing the total to 51, and extend stockpiling targets for vulnerable minerals to as much as 365 days from 180 days. Trade Minister Kim Jung-kwan stressed that resource security is a matter of national survival that protects people's livelihoods and industry.
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