Samsung bulks up on bonds with its US$60b cash pile

[SEOUL] Samsung Electronics is buying more local bonds with its US$60 billion cash pile as domestic banks grow reluctant to overload on deposits from the South Korean giant.

The investments by the world's biggest smartphone maker underscore the challenge of managing its huge and growing reserves, with banks increasingly wary that it could withdraw short-term deposits upon maturity and create funding problems.

Samsung bought more than two-thirds of a 300 billion won (S$367 million) two-year debt issue last Friday by Kookmin Bank, a unit of KB Financial Group Inc and the country's largest commercial bank by assets, a person with direct knowledge of the matter said. Dealers also said Samsung, which accounted for almost a third of all global smartphone shipments in the first quarter, bought nearly 300 billion won worth of three-year treasury bonds late last month.