The default rate of corporate bills in South Korea worsened to the highest level in 13 years last year due mainly to cash-squeezed conglomerates and sluggish economic conditions for local companies.

The average annual corporate bill default rate reached 0.19 percent last year, hitting the highest level since 0.38 percent in 2001, according to the data by the Bank of Korea and the Korea Financial Telecommunications & Clearings Institute.

The figure had soared to 0.52 percent in 1997 from 0.17 percent the previous year as Asia's fourth-largest economy struggled from the Asian financial crisis. It improved to 0.11 percent in 2002 but backtracked to around 0.15 percent during the global financial crisis.

The default rate had improved to the low 0.1 percent level between 2011-2012 but started rising again as STX, Tong Yang and other conglomerates ran into heavy cash shortages.

A central bank official blamed much of last year's rise in defaults to STX and Tong Yang.

 While the use of corporate bills has waned in recent years, the default rate of corporate bills is often used to measure the financial stability of companies. (Yonhap)