Korea mulls restrictions that would limit certain foreign banks from arranging overseas bond sales, informal guidance has already played a role in delaying at least one such deal, people familiar with the matter said.

Lotte Rental Co., the country’s largest car rental company, said on Tuesday it delayed a debut public US dollar offering. The decision was partly the result of a steer from the government, also known as window guidance, according to the people, who asked not to be named because the talks were private.

Authorities expressed concerns about the company’s request to appoint KGI Asia as an arranger because the Taiwanese lender doesn’t have a local securities license, the people said. The setback prolonged the process long enough for rising yields to make conditions unfavorable, which was a factor in the firm’s decision to postpone the bond sale, they said.

Lotte Rental’s case marks the first known instance of a deal being disrupted since Korean officials reportedly began weighing curbs that would limit foreign investment banks without a domestic securities license from arranging offshore bond sales for local borrowers. It also underscores how informal regulatory approvals can shape the outcome of transactions without an official decision ever being announced.

It is common practice in South Korea for bond issuers to submit their plans, including the potential size, currency and arrangers of a deal, to the Ministry of Finance and Economy before an international bond sale. The ministry then typically gives an informal go-ahead and assigns the borrower a schedule for issuance, which usually spans about a week.

Lotte Rental had initially appointed Citigroup, Credit Agricole CIB, HSBC Holdings Plc and Mizuho Financial Group Inc. — which all have domestic licenses — to lead the planned three-year dollar bond offering. The company later tried to add KGI as an arranger because the bank agreed to underwrite a portion of the deal, the people familiar said.

But the government nudged the company to reconsider adding KGI, which doesn’t have a domestic securities license, the people said. That led to delays just as the Federal Reserve raised rates in September. By then, investors demanded spreads that were too high for Lotte Rental to go ahead with the deal, they said.

“The primary driver behind the delay was external variables, such as rising US Treasury yields,” a Lotte Rental spokesperson said, adding that the company had considered adding more arrangers but ultimately decided not to. “The issuance schedule was based on the firm’s decisions regarding market yields, rather than external factors.”The Korean finance ministry recently asked the Korea Financial Investment Association for feedback on potential regulations that would limit some offshore banks from certain activities if they don’t hold a domestic securities license. The proposal has sparked controversy because of how it would impact global banks’ businesses in the country and constrain local bond issuers.

The government aims to examine the regulatory gaps regarding the domestic business activities of unlicensed investment banks, in an attempt to match global standards, the finance ministry reiterated in a statement.

Foreign bond sales by South Korean issuers have surged this year by 32% to $67 billion from the year-earlier period, according to data compiled by Bloomberg. The market ranks third in Asia behind peers in Japan and Australia for bond offerings in the dollar and euro combined so far this year.