This article was published on Sept. 18, 2026, at 11:18 a.m. on Signal, a capital markets news service.
Kiwoom Securities (039490) has issued 400 billion won ($288 million) in hybrid securities, the first such issuance since the brokerage was founded, with the entire amount placed with institutional investors. Although the cost of issuance has risen sharply following recent U.S. rate increases, the move is seen as an effort to expand its short-term financing business, known as promissory notes, and to narrow the earnings gap with the country's largest brokerages.
Kiwoom Securities issued the 400 billion won in privately placed hybrid securities on the 18th, according to investment banking sources. The securities carry a 30-year maturity with a call option allowing early redemption after five years. The coupon rate for the first five years is 5.65%, and if the call option is not exercised, a step-up clause requires an additional 2 percentage points of interest each year. The full amount was raised from institutional investors including insurers and asset managers.
It is the first hybrid securities issuance in the brokerage's history. The last time Kiwoom Securities raised capital externally was five years ago, when it issued 400 billion won in redeemable convertible preferred shares to investors including its largest shareholder, Daou Tech, as well as insurers and brokerages. Kiwoom's equity capital had grown to 6.89 trillion won as of the first half on a separate basis, and will rise to 7.29 trillion won once the 400 billion won payment is completed.
Competition over equity capital among comprehensive financial investment business operators is expected to intensify further. Hana Securities, which is vying with Kiwoom for seventh and eighth place in the industry by equity capital, issued hybrid securities in June to add 500 billion won in accounting capital, and is now pursuing a series of foreign-currency hybrid issuances worth $300 million (about 411 billion won). Daishin Securities (003540), which became a comprehensive financial investment business operator last year, and Meritz Securities (008560), which is awaiting final approval for promissory note issuance, have secured 200 billion won and 368 billion won respectively since the second half alone.
Still, with rates rising in both Korea and the U.S., the yield on five-year treasury bonds climbed to 4.262% on the 17th, the highest level since October 2023, sharply increasing the cost of capital-raising compared with the past. Kiwoom's hybrid securities were priced at the final quote on five-year treasury bonds plus a spread of about 1.36 percentage points, a structure in which issuance costs inevitably rise along with government bond yields.
Analysts see the move as weighted toward strengthening competitiveness in the promissory note business and expanding corporate finance earnings. Korea Investment & Securities posted 246 billion won in pretax net profit from corporate finance alone in the first half on a separate basis, while Kiwoom Securities (99 billion won), Hana Securities (minus 43.6 billion won), Meritz Securities (42 billion won) and Daishin Securities (60.8 billion won) remained far behind, leaving them in urgent need of funds to take on high-quality corporate finance assets.
