Woori Asset, Korea Life add corporate bonds

South Koreas biggest bond investors are favouring corporate debt as a drop in sovereign yields saps demand for government securities, Bloomberg reported on Friday.Woori Asset Management Company, a unit of South Koreas largest financial group by assets, and Korea Life Insurance Company, the nations second-largest life insurer, said they were adding to their holdings of corporate bonds. The extra yield investors demand to hold five-year corporate debt rated AA- over government securities was 99 basis points on November 23, from a 15-month high of 107 on October 20, according to Koscom Corporation, which provides financial data from Korea Exchange Incorporated "Most Korean companies rated over A are affiliates of large corporate groups and have very low risk of default even if the economy slows," Kim Kihyun, who manages 13 trillion won of debt as head of fixed-income at Woori Asset in Seoul, said in an interview on November 23. Woori started boosting its corporate holdings last month and plans to stay "overweight" through the first half of next year, he said. The Bank of Korea kept borrowing costs unchanged at 3.25 per cent on November 11 as slowing domestic growth and Europes deepening debt crisis prompted policy makers to pause their fight against inflation.
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