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Gov't to provide additional liquidity, ease refinancing for firms affected by Middle East conflict

Published: 07 Apr. 2026, 16:48 Updated: 07 Apr. 2026, 17:11

The Yeosu National Industrial Complex in South Jeolla [YONHAP]

Finance authorities will expand policy financing programs and ease bond refinancing burdens for companies affected by the prolonged crisis in the Middle East, the financial regulator said Tuesday.

Financial Services Commission (FSC) Chairman Lee Eog-weon made the remarks during a meeting with officials from the petrochemical and refining industries, which are particularly vulnerable to global supply disruptions and rising costs stemming from the U.S.-Israeli conflict with Iran.

The government expanded the size of emergency funding programs from 20.3 trillion won ($13.5 billion) to 24.3 trillion won late last month and plans to increase it further to 26.8 trillion won through a supplementary budget, according to the FSC.

Private financial institutions, including five major financial holding groups, are also expected to supply more than 53 trillion won in new financing programs.

Starting Tuesday, small and mid-sized firms affected by the war in the Middle East will be allowed to lower repayment ratios and reduce interest premiums when refinancing primary collateralized bond obligations (P-CBOs) within one year. P-CBOs are securities backed by a pool of corporate bonds.

The Korea Development Bank and the Export-Import Bank of Korea are also discussing measures to provide liquidity support for crude oil procurement by the Korea National Oil Corp. to help stabilize the petrochemical and refining sectors.

A 1 trillion won corporate restructuring fund will be established this month to make investments in six key industries, including petrochemicals, to support business restructuring and financial improvements, the FSC said.

During the meeting, industry participants said prolonged disruptions could eventually lead to production stoppages, though they are securing emergency raw materials from the United States, Africa and other regions, calling for continued financial support.

Yonhap