South Korean public corporations’ bond sales have nearly doubled in three years as they increasingly resort to debt issuance to help finance state development projects, financial sources said Sunday.

The value of outstanding bonds issued by state land developer LH Corp. and other public corporations under the central and provincial governments came to 283 trillion won ($247 billion) as of Friday, according to the sources.

The figure is up 89 percent from 150 trillion won at the end of 2008 and amounts to a whopping 87 percent of the government’s 326 trillion won budget for next year.

The amount of bond issuance by public corporations stood at 210 trillion at the end of 2009 and 261 trillion won as of the end of 2010.

LH Corp. held the largest amount of outstanding bonds worth 57 trillion won, trailed by Korea Housing Finance Corp. with 36 trillion won, Korea Finance Corp. with 32 trillion won and Korea Electric Power Corp. with 25 trillion won.

Market watchers said public corporations’ outstanding bonds have risen at an alarming rate as they sell debt to fund state projects on behalf of the government, whose bond sales are subject to a legal ceiling.

They predicted bonds sales by public companies are expected to rise further next year as their bonds worth around 40 trillion won are expected to mature. 

(Yonhap News)