Issuing State Bonds
The Korean government will sell a combined 5.8 trillion won (US$5.12 billion) worth of state bonds through a competitive bid in October.
The Ministry of Strategy and Finance announced the “State Bond Issuance Plans for October 2017 & State Bond Issuance Results for September” on September 21. It said it will issue 1.15 trillion won (US$1.02 billion) in bonds with a maturity of three years, 1.35 trillion won (US$1.19 billion) in five-year bonds, 1.2 trillion won (US$1.06 billion) in 10-year bonds, 550 billion won (US$485.44 million) in 20-year bonds and 1.55 trillion won (US$1.37 billion) in 30-year bonds in October.
It is possible to acquire additional bonds within three business days after the buy-in date within the limit of 5 to 50 percent of the amount of competitive bids by each primary dealer (PD). Based on the performance in the first half of this year, the top PD group will receive 20 percent, secondary group 15 percent, third highest group 10 percent and other PD groups 5 percent. The PD groups with best monthly evaluation will also receive additional points of 10 percent.
The government will routinely sell up to 150 billion won (US$132.3 million) worth of Separate Trading of Registered Interest and Principal of Securities (STRIPS) as well as 250 billion won (US$220.5 million) worth of STRIPS with a maturity of 30 years. STRIPS PD can acquire up to 20 billion won (US$17.64 million) worth of STRIPS within three business days after the date awarded.
PDs can acquire inflation-indexed government bonds within one business day after the date awarded within 25 percent of the amount of 10-year bonds.
Individual investors can make request through PDs in one business day after the day of tender within the limit of 60 billion won (US$52.89 million), which is 5 percent of the amount of 10-year bonds to be issued.
The government will sell 3.5 trillion won (US$3.09 billion) worth of treasury bonds three times and swap 300 billion won (US$254.43 million) of treasury bonds two times. In September, it sold a total of 7.77 trillion won (US$6.85 billion) worth of treasury bonds.