[Sejong=Asia Economy Reporter Kim Hyunjung] The Ministry of Economy and Finance announced on the 25th that it will issue 14 trillion won worth of government bonds next month through a competitive bidding process involving professional dealers (PDs) and others.
In addition to the competitive bidding method, the government bonds issued this time can be acquired by PDs and the general public through a non-competitive subscription method at the highest winning bid interest rate for each maturity during the competitive bidding.
If the general public submits a bid form through a government bond professional dealer by the day before the bidding, they will be given priority allocation within 20% of the planned issuance amount for competitive bidding, excluding the 50-year bonds (a total of 2.8 trillion won).
Each PD company can additionally acquire government bonds within 5-30% of the winning bid amount of the competitive bidding for each maturity within 3 business days after the winning bid date.
Each strip PD can acquire strip bonds within 3 business days after the winning bid date for each maturity, up to 20 billion won within the ranges of 208 billion won for 3-year and 5-year bonds, 258 billion won for 10-year and 30-year bonds, and 160 billion won for 20-year bonds.
To enhance liquidity of government bonds, exchanges of about 300 billion won between elapsed issues and benchmark issues of 10-year, 20-year, and 30-year bonds, and about 100 billion won between elapsed issues and benchmark issues of inflation-linked bonds are planned respectively.
Through the non-competitive subscription system, each PD company can acquire a certain amount of government bonds at the interest rate announced on the bidding day (March 26).
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