South Korea's central bank and financial regulators scrambled this week to contain the risks of wider financial fallout as local short-term yields spiked, crippling some major institutions' ability to meet near-term funding needs.
While official efforts to calm markets have prevented wider dysfunction in financial markets this week, money market confidence is fragile with the yield on 91-day commercial paper at a 13-year high of 4.58% on Friday from 3.25% a month earlier. The missed debt payment by the Gangwon Jungdo Development has raised questions about loans related to hundreds of thousands of other projects in Asia's fourth-largest economy and even drawn alarming parallels with China'sIt also shocked some investors as the case showed even state-backed developers at risk of defaults amid surging interest rates. The company is 44% owned by Gangwon Province, whose asset-backed commercial paper was A1 rated and guaranteed by the local government.
Legoland, a the park resort on the island of Chuncheon that boasts 40 rides and a 154-room hotel, said on Thursday it will close down for three months starting January 2023 "for maintenance."Some top-tier state-run enterprises have struggled to obtain financing this week, even after the government's 50 trillion won AAA rated state-run Korea Electric Power Corp. failed to get enough bidders for its three-year corporate bonds on Tuesday, while Korea Gas Corp.