Corporate financing in South Korea continued to fall last month as concerns mounted over credit crunch among low-credit companies, financial watchdog data showed Wednesday.

Corporate financing through public offers such as equity issuance and bond sales declined 16.6 percent from a month earlier to 7.12 trillion won (6.56 billion U.S. dollars) in January, according to the Financial Supervisory Service (FSS). The reading was down 34.5 percent from the same month of last year.

Debt financing has faltered since Kukdong Engineering & Construction, a midsize builder, surprisingly filed for court receivership in September 2012. It boosted concerns over credit crunch among companies with low credit ratings.

There was no issuance of bonds among small- and mid-sized enterprises (SMEs) and companies with ratings of BB or below in January. Big corporations with ratings of A or above accounted for 96.8 percent of last month's total debt financing.

Corporate bond issued in January totaled 6.96 trillion won, down 10 percent from the prior month. Issuance by industrial companies and financial institutions fell by 0.2 percent and 1.6 percent each, with the figure for asset-backed securities (ABS) plunging 86.8 percent.

Equity financing such as rights offering and initial public offering (IPO) sank 80.3 percent to 157.3 billion won in January, keeping its downward trend amid the lackluster stock market.

Rights offering declined to 81.4 billion won in January from 788.3 billion won in the prior month, while there were four IPOs last month valued at 75.9 billion won. (1 U.S. dollar equals 1,085 won)