- Published 2026.11.08 10:15
48.3 trillion won concentrated in the first half alone
Even blue-chip firms pay 0.7 percentage point higher rates
Low-rated firms face liquidity crisis despite double-digit yields
With a massive 72.3 trillion won (about $53 billion) in corporate bond maturities due next year, market rates are also expected to hit their annual peak, putting companies on alert over refinancing. In particular, as maturities are concentrated in the first half, concerns are growing that low-rated companies lacking their own repayment capacity could be pushed into a liquidity crisis.
According to the Korea Financial Investment Association and the bond market, corporate bond maturities in 2027 total 72.3 trillion won (about $53 billion), with 66.8%—or 48.3 trillion won (about $36 billion)—concentrated in the first half. January's 11.7 trillion won (about $8.6 billion) and February's 12.6 trillion won (about $9.3 billion) alone amount to 24.4 trillion won (about $18 billion) in the first two months, the largest ever. This is because three-year corporate bonds issued in large volumes in January 2024, when monthly issuance hit a record 13.1 trillion won (about $9.7 billion), are all coming due at once. Of next year's total maturities, 29 trillion won (about $21 billion)—57%—are three-year bonds issued in 2024, and 72% of January maturities are concentrated in this period.
The biggest problem is that funding costs have jumped sharply compared with three years ago. In January 2024, the average monthly yield on unsecured AA- rated three-year corporate bonds was 4.01% per annum, while three-year Korea Treasury Bonds yielded 3.27%. By contrast, as of Nov. 4, three-year KTB yields had surged to 3.703% and corporate bond yields to 4.388%. With three-year KTB yields expected to peak at an average of 4.00% in the first quarter of next year and credit spreads—the gap between KTB and corporate bond yields—seen widening to 71 bp (basis points), the funding environment is set to become even harsher.
As a result, even blue-chip companies will have to pay around 4.7% per annum when refinancing in the first quarter of next year, about 0.7 percentage point higher than their existing coupon rates. With interest costs snowballing even for top-tier firms, the refinancing burden for low-rated companies (A+ and below) has reached its limit. Yields on BBB- rated three-year corporate bonds, close to speculative grade, already stood at 10.216% per annum as of Nov. 4—a double-digit rate. Low-rated corporate bonds have already posted net redemptions of 5.2 trillion won (about $3.8 billion) this year, the most severe funding squeeze since 2017 (5.5 trillion won (about $4.1 billion)).
The funding difficulties of low-rated companies are already visible in the market. E-Land World, rated BBB, saw its book-building for a 20 billion won (about $15 million) one-year bond in August end undersubscribed, and it barely filled the order through additional subscriptions. On the same day, it had to repay two-thirds of a maturing 60 billion won (about $44 million) bond using its own reserves. While major conglomerates increased borrowing from the five largest commercial banks by about 20 trillion won (about $15 billion) in the first half of this year as the corporate bond market became harder to access, companies with low credit ratings and weak business conditions are finding it difficult even to pass banks' tightened credit screening.
Typically, the start of the year brings a so-called year-opening effect, with institutional investors beginning to deploy funds and demand for corporate bonds surging. But next year, that tailwind is likely to be strictly limited to top-rated issuers. The first quarter of 2027 is expected to be a critical watershed, as concentrated maturities and peak issuance yields combine to make corporate credit risk a reality. If the seasonal liquidity of the year-opening effect fails to fill the steep credit spreads on low-rated bonds, the early-year maturity cliff is highly likely to act as a direct trigger for a chain of liquidity crises among low-rated companies.
(Dollar figures are approximate, converted automatically at 1,000 won = $0.738, the rate on Nov. 8, 2026.)
※ This article is an AI translation of the Korean original published by Korea Credit News; it was checked by automated quality guards and published by the English edition desk.
