MoEF to Issue 1.3 Trillion Won Treasury Bonds on 26th...Non-Competitive Subscription Method

[Sejong=Asia Economy Reporter Kim Hyunjung] The Ministry of Economy and Finance announced on the 19th that starting this month, it will issue a certain amount of government bonds each month through a non-competitive subscription method. The first auction will be held on the 26th.

The non-competitive subscription method involves issuing a pre-announced amount of bonds at a pre-announced interest rate, introduced to evenly distribute the monthly issuance volume. Government bond primary dealers (PDs) can bid for demand volumes by maturity, and the winning volumes are allocated proportionally to each PD's bid volume within the pre-announced issuance volume range. The issuance volume will be announced on the 23rd, and the issuance interest rate will be announced on the auction day, the 26th, reflecting market conditions such as circulating interest rates.

The scheduled issuance amount for the February government bonds under the non-competitive subscription method is a total of 1.3 trillion KRW, divided into 2-year, 3-year, and 5-year bonds. The 2-year bond will be issued at 300 billion KRW (Gukgo00750-23030), the 3-year bond at 600 billion KRW (Gukgo00875-2312), and the 5-year bond at 400 billion KRW (Gukgo01125-2509).

PDs are divided into two groups for bidding by maturity based on their mandatory performance evaluation results from the previous month. Group 1 includes all 17 PDs, with the scheduled issuance amount being 60% of the issuance amount for the respective maturity. The bidding limit per PD in this group is 20% of the group's scheduled issuance amount.

Group 2 consists of the top 10 PDs based on the previous month's mandatory performance evaluation results, with the scheduled issuance amount being 40% of the issuance amount for the respective maturity. The bidding limit per PD in this group is 30% of the group's scheduled issuance amount.

This content was produced with the assistance of AI translation services.