Government to Issue 14.5 Trillion Won in May Treasury Bonds with Priority Allocation to the Public

[Asia Economy Reporter Jang Sehee] The Ministry of Economy and Finance announced on the 29th that it plans to issue KRW 14.5 trillion worth of government bonds next month through a competitive bidding method involving primary dealers (PDs) and others.

In addition to the competitive bidding method, primary dealers and the general public can also purchase a certain amount at the highest winning bid rate of each maturity during the competitive bidding through a non-competitive subscription method.

If the general public submits a bid through a primary dealer by the day before the bidding, they will be given priority allocation within 20% (a total of KRW 2.82 trillion) of the planned competitive bidding issuance amount.

Each primary dealer can additionally purchase between 5% and 35% of the competitive bidding winning amount within three business days after the winning date.

Each strip primary dealer can purchase up to KRW 20 billion within the ranges of KRW 208 billion for 3- and 5-year bonds, KRW 258 billion for 10- and 30-year bonds, and KRW 160 billion for 20-year bonds within three business days after the winning date.

To enhance liquidity of government bonds, exchanges of about KRW 200 billion between the 10- and 20-year elapsed issues and the 30-year benchmark issue, and about KRW 100 billion between the inflation-linked elapsed issues and the inflation-linked benchmark issue will be conducted respectively.

Meanwhile, through the non-competitive subscription system, each primary dealer can purchase a certain amount of government bonds on the bidding day, May 28, according to the interest rate announced on the same day.

The non-competitive subscription issuance items and planned issuance amounts will be separately announced on May 21 at 5 p.m. via the government bond market website (ktb.moef.go.kr) and others.

Meanwhile, the government bonds to be issued by the Ministry of Economy and Finance next month by maturity are as follows: ▲ 2-year bonds KRW 1.2 trillion (auction on May 12) ▲ 3-year bonds KRW 3 trillion (auction on May 11) ▲ 5-year bonds KRW 2.7 trillion (auction on May 25) ▲ 10-year bonds KRW 2.9 trillion (auction on May 18) ▲ 20-year bonds KRW 800 billion (auction on May 26) ▲ 30-year bonds KRW 3.5 trillion (auction on May 6) ▲ 50-year bonds KRW 400 billion (auction on May 17).