Government to Issue KRW 12.1 Trillion in Treasury Bonds in May

[Asia Economy Reporter Kwangho Lee] The government will issue government bonds worth 12.1 trillion KRW in May through a competitive bidding process.

The Ministry of Economy and Finance announced on the 23rd in the 'May 2020 Government Bond Issuance Plan and April Issuance Performance' that it will issue 2.7 trillion KRW of 3-year government bonds, 2.2 trillion KRW of 5-year government bonds, 3 trillion KRW of 10-year government bonds, 900 billion KRW of 20-year government bonds, and 3 trillion KRW of 30-year government bonds.

If the general public submits a bid through a government bond primary dealer (PD) by the day before the bidding, they will be given priority allocation within 2.42 trillion KRW, which is 20% of the competitive bidding issuance amount excluding the 50-year bonds.

Each PD can additionally purchase government bonds within 10-35% of the competitive bidding winning amount within 3 business days after the winning date for each bond maturity.

Strip bonds (principal and interest separated) will be supplied up to 160 billion KRW per maturity. For 10-year and 30-year bonds, 210 billion KRW will be supplied. Strip PDs can purchase up to 20 billion KRW.

Inflation-linked government bonds can be applied for on the bidding day and the following day within 10% of the monthly issuance amount of 150 billion KRW per PD (pre-sale 100 billion KRW, main sale 50 billion KRW) for 10-year bonds.

The general public can apply through PDs up to 10 billion KRW, which is 10% of the monthly issuance amount of inflation-linked government bonds, by the 10-year bond bidding day.

To enhance government bond liquidity, an exchange between matured inflation-linked bonds and benchmark inflation-linked bonds will be conducted on a scale of 100 billion KRW. This will be carried out twice with a total scale of 200 billion KRW.