SEOUL, Aug. 7 (Yonhap) — Corporate bond issues in South Korea shot up nearly 74 percent in July due to higher sales of low-grade debt, industry data showed Friday.

South Korean companies floated bonds worth 20.8 trillion won (US$17.5 billion) last month, up 73.5 percent from the previous month, according to the data from the Korea Financial Investment Association.

The association said corporate debt dales soared in July, driven by a spike in low-grade bond issues through private placement.

Sales of privately placed corporate bonds stood at 14.7 trillion won in July, up a whopping 11.6 trillion won from the previous month. In contrast, issues of gilt-edged bonds with a credit rating of AA and higher sank 27.2 percent on-month to 3.1 trillion won.

The data also showed overall bond sales in South Korea coming to 85.2 trillion won in July, up 1.9 trillion won from the prior month.

The value of bonds traded over the counter came to 487.3 trillion won last month, down 28.9 trillion won from April, with the daily turnover dropping by 2.3 trillion won to 21.2 trillion won.

Foreign holdings of South Korean bonds rose by 3.5 trillion won to a new record of 150.2 trillion won. Offshore investors bought a net 6.3 trillion won worth of local bonds in July, lured by relatively high interest rates here and hopes for the won’s strength, the association said.