Next Month, KR Treasury Bonds Issued Worth 10.5 Trillion Won... Competitive Bidding Method

MoEF, Announces 'January 2023 Government Bond Issuance Plan'

[Asia Economy Sejong=Reporter Lee Junhyung] The government will issue KRW 10.5 trillion worth of government bonds next month through a competitive bidding process.

The Ministry of Economy and Finance announced on the 26th the "January 2023 Government Bond Issuance Plan" containing this information. According to the plan, the Ministry will issue KRW 10.5 trillion worth of government bonds next month through a competitive bidding process involving professional dealers (PDs) and others. The issuance schedule includes KRW 1.2 trillion of 2-year bonds (auction on January 12), KRW 1.9 trillion of 3-year bonds (auction on January 10), KRW 1.8 trillion of 5-year bonds (auction on January 31), KRW 2 trillion of 10-year bonds (auction on January 17), KRW 700 billion of 20-year bonds (auction on February 1), KRW 2.6 trillion of 30-year bonds (auction on January 3), and KRW 300 billion of 50-year bonds (auction on January 16).

Government bonds can also be acquired through methods other than competitive bidding. PDs and the general public can acquire a certain amount at the highest successful bid rate for each maturity during the competitive bidding through a non-competitive subscription method. If the general public submits a bid through PDs by the day before the auction, they are given priority allocation within 20% (KRW 2.04 trillion) of the planned competitive bidding issuance amount. However, 50-year bonds are excluded.

PDs can additionally acquire 10-35% of the competitive bidding successful bid amount within three business days after the auction date. For STRIPS bonds, which separate principal and interest, PDs can acquire up to KRW 20 billion within the ranges of KRW 221 billion for 3- and 5-year bonds, KRW 271 billion for 10- and 30-year bonds, and KRW 170 billion for 20-year bonds.

The Ministry plans to conduct exchanges worth about KRW 200 billion between elapsed issues and benchmark issues of 10- and 20-year bonds to improve liquidity. It will also conduct exchanges worth about KRW 100 billion between elapsed inflation-linked bonds and benchmark inflation-linked bonds.

Meanwhile, the issuance scale of government bonds this month was recorded at KRW 3.8 trillion (nominal bonds).

Vice Minister Choi Sang-dae Presiding Over the Treasury Bond Issuance Strategy Council
(Seoul=Yonhap News) Vice Minister Choi Sang-dae of the Ministry of Economy and Finance is presiding over the "4th Treasury Bond Issuance Strategy Council" held at the Bankers' Hall in Jung-gu, Seoul on the 22nd. 2022.12.22 [Provided by the Ministry of Economy and Finance. Resale and DB prohibited]
Photo by Choi Sang-dae
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