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Korea Dominates in Asia Leveraged Loans on Private Equity

Friday, July 20, 2018

(Bloomberg by Carol Zhong and Kyungji Cho) - South Korean lenders have dominated the ranks of firms participating in leveraged loans in Asia excluding Japan this year, as they provide funds for private equity firms that are on a buying binge of the country’s assets.

Eleven financial institutions from the peninsula, led by government-backed Korea Development Bank, took up all the top spots as the most active participants in the region’s leveraged facilities this year through July 2, according to data compiled by Bloomberg. Last year the firms were a mix of European, Korean and Taiwanese lenders.

In Asia excluding Japan as a whole, leveraged loans came to $14 billion via 35 deals this year through July 2, nearly tripling from $5.5 billion via 18 transactions from the same period last year, according to data compiled by Bloomberg.

Cash committed to private equity funds in Korea has been increasing, coming to about 62.6 trillion won ($55 billion) at the end of 2017, from 20 trillion won at the end of 2009, according to the Financial Supervisory Service. Funds will also have plenty of cash in search of investment targets to take care of the nation’s growing senior population -- the National Pension Service, the country’s biggest retirement fund, manages more than 600 trillion won.


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