FX Stabilization Bonds Issued Worth $1.7 Billion... Dollar Bonds Achieve Record-Low Spread

by Jo Youjin

Published 23 Oct.2025 11:00(KST)

Yonhap News Agency

The Ministry of Economy and Finance announced on the 23rd that it has successfully issued foreign exchange equalization fund bonds (FX stabilization bonds) denominated in US dollars and Japanese yen, totaling USD 1.7 billion.

This issuance consists of USD 1 billion in five-year US dollar-denominated bonds and JPY 110 billion (equivalent to USD 700 million) in yen-denominated bonds with maturities of 2, 3, 5.25, and 10 years.

The coupon rate for the five-year dollar bonds is 3.741%, which is the five-year US Treasury yield plus a spread of 17 basis points (1bp = 0.01 percentage point). For the yen bonds, the coupon rate ranges from 1.065% to 1.919%.

The Ministry explained that the spread for the five-year US dollar FX stabilization bonds has decreased from 24bp last year to a record low of 17bp. For the yen-denominated FX stabilization bonds, the spread is between 16bp and 46bp, also lower than the previous yen bond issuance in 2023, which was between 23bp and 48bp.

The Ministry stated that achieving a record-low spread reflects an improved market assessment of Korea's current economic conditions and policy direction.

The Ministry added, "The fact that our FX stabilization bonds were issued for the first time ever at a spread in the 10bp range compared to US Treasury bonds, which are considered the world's safest assets, demonstrates the further maturity of Korea's economic fundamentals."

It continued, "With this FX stabilization bond issuance, we have significantly increased our foreign exchange reserves. Including the EUR 1.4 billion issued in the first half of the year, we have successfully issued a total of USD 3.4 billion in FX stabilization bonds this year, marking the largest annual issuance since 1998 (USD 4 billion)."