Ministry of Economy and Finance to Issue KRW 600 Billion Treasury Bonds This Month via Non-Competitive Bidding

2-Year Bonds 100 Billion KRW, 3-Year Bonds 100 Billion KRW, 30-Year Bonds 400 Billion KRW

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The Ministry of Economy and Finance announced on the 19th that it plans to issue a total of 600 billion KRW worth of government bonds this month through a 'non-competitive subscription method.' The non-competitive subscription method involves announcing the issuance volume and interest rate of government bonds in advance, then issuing and allocating them accordingly.

The Ministry of Economy and Finance has been issuing government bonds through the non-competitive subscription method since last month. It previously announced that a total of 1.3 trillion KRW would be issued in February, divided into 2-year, 3-year, and 5-year bonds.

This time, the issuance volume totals 600 billion KRW, consisting of 100 billion KRW for 2-year bonds, 100 billion KRW for 3-year bonds, and 400 billion KRW for 30-year bonds.

Government bond Primary Dealers (PDs) can bid for demand volumes by maturity, and the awarded volumes will be allocated proportionally to each PD’s bid volume within the pre-announced issuance volume range.

PDs are divided into two groups for bidding by maturity based on last month’s mandatory performance evaluation results. Group 1 includes all 17 PDs bidding, with the scheduled issuance amount set at 60% of the respective maturity’s planned issuance volume. The bid limit per PD in this group is capped at 20% of the group’s scheduled issuance amount.

Group 2 consists of the top 10 PDs from the previous month’s mandatory performance evaluation, with the scheduled issuance amount set at 40% of the respective maturity’s planned issuance volume. The bid limit per PD in this group is capped at 30% of the group’s scheduled issuance amount.

Meanwhile, the issuance interest rates by maturity will be separately announced at 10:20 AM on the 26th, the bidding day, taking into account market conditions such as prevailing yields.

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