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Investors Buy $227 Million Of Bad Debt

Feb 10,2001
Korea Deposit Management Corporation sold 286 billion won ($227 million) of defaulted debt to foreign investors Friday. In international competitive bidding, Lonestar, a U.S. investment fund, and Merry Lynch were chosen to repurchase the debt which Resolution Financial Corporation acquired from financial institutions, including Korea First Bank. Resolution Financial Corp. is a subsidiary of the Korea Deposit Management Corporation.

Principal of the debt is 624.6 billion won, and the debt was sold at 46 percent of the original amount.

Korea Deposit Management Corp. will receive 20 percent of the payment this month, and the rest will be received in April, when the debt transfer ends.

The value of the defaulted debt was low because the debt was held by firms under receivership, said an official of Korea Deposit Management Company.

by Song Sang-hoon