South Korean Securities Firms Issue 10 Trillion Won in Bonds to Cover Leverage ETF Margin Calls

According to Korean Economic TV, South Korean securities firms have sharply increased corporate bond issuance in July 2026 to cover margin deposits required by their role as liquidity providers for single-stock 2x leveraged ETFs tracking Samsung Electronics and SK Hynix. Kiowoon Securities issued 400 billion won and Samsung Securities issued 600 billion won in bonds this month, as margin settlement requirements surged due to heightened stock price volatility.

The issuance spike has diverted capital from general corporate bond markets. Only seven companies issued corporate bonds this month, compared with 25 one year ago, while corporate bond financing rates climbed to 4.59%. First-half 2026 total corporate bond issuance fell 10 percent year-over-year to 67.37 trillion won, marking the lowest net issuance level in a decade.