(Source from Reuters/Alamy)In 2011, Britain’s Merlin Entertainment Group and Gangwon Province signed a contract to build a Legoland on an island called Jungdo in Chuncheon.
The following year, Gangwon-do established the Gangwon Intermediate Development Corporation, a special purpose corporation for the creation of Legoland, and planned to open it in 2015.
However, large prehistoric remains are discovered during civil engineering for development.
It is also the world’s largest city-class site, and construction is suspended as the remains continue to emerge.Construction resumed to avoid damaging the ruins as much as possible, but this time, the COVID-19 incident broke out.
Construction is delayed, and the opening is naturally delayed, and the cost increases like a mountain.
In the end, Gangwon Intermediate Development Corporation issues bonds to borrow money to raise additional funds.
By the way, as a loaner, you can’t lend money to the sluggish Legoland business, can you? That’s why Gangwon Province guarantees payment.
He said, “If you don’t pay me back, we’ll pay you back.”So we issued 205 billion bonds, and that’s the ABCP, asset-backed corporate bill that’s being talked about a lot now.
However, another important change occurs in Gangwon-do. Gangwon Province Governor Kim Jin-tae will be elected as a new governor in June this year.
On the 28th of last month, Governor Kim announced to the court that he would apply for the rehabilitation of the Gangwon Intermediate Development Corporation a day before the bond expiration date.
What it means is that Gangwon-do pays off the assets of a company called Gangwon Intermediate Development Corporation by selling them as much as possible, and if they fail to do so, Gangwon-do pays back the shortfall.
The bond market is shocked.The national government cannot guarantee credit either.
It is taken as a sign that Gangwon-do will not pay back its debts instead.
The country’s guarantee of a credit-backed bond market gives it considerable confidence in the bond.
However, due to the outbreak of Legoland, there is no place to trust in the bond market, which is simply a bomb of distrust.
Eventually, the bond market, which did not have money circulating due to market instability, became more strained.Even public and private bonds with the highest credit rating are not being sold.
(Source from Reuters/Alamy)It is known that Korea Electric Power Corporation and Busan Transportation Corporation, which have a credit rating of AAA, failed to issue bonds due to a lack of people.
As the situation expands to the treasury bond market, it is leading to investors selling losses.
Currently, Korea is competing fiercely with the ruling party, the Democratic Party’s fierce battle, the Daejang-dong development case, and the ruling first lady’s stock speculation case in the last administration.
On top of that, North Korea’s continued provocations. Will the political situation in South Korea be okay? It’s worrying and worrying.
JULIE KIM
ASIA JOURNAL
