June Treasury Bonds 14.5 Trillion Competitive Bidding... Fiscal Bonds Issued 8 Trillion

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is giving a briefing on the "Comprehensive Support Plan for the Semiconductor Ecosystem" at the Government Seoul Office in Jongno-gu, Seoul, on the 23rd. Photo by Kang Jin-hyung aymsdream@

The government will issue treasury bonds worth 14.5 trillion KRW and fiscal bonds worth 8 trillion KRW next month.

On the 23rd, the Ministry of Economy and Finance announced that it will issue approximately 14.5 trillion KRW of treasury bonds in June through a competitive bidding process involving primary dealers (PDs) and others. This amount is 500 billion KRW less than the previous month’s issuance of 1.5 trillion KRW.

By maturity, the competitive bidding issuance will include 1.7 trillion KRW of 2-year bonds, 2.8 trillion KRW of 3-year bonds, 2.3 trillion KRW of 5-year bonds, 2.7 trillion KRW of 10-year bonds, 700 billion KRW of 20-year bonds, 3.8 trillion KRW of 30-year bonds, 400 billion KRW of 50-year bonds, and 100 billion KRW of inflation-linked bonds.

PDs and the general public can non-competitively subscribe to a certain amount at the winning bid rate for each maturity during the competitive bidding.

The Ministry plans to conduct an exchange of about 500 billion KRW between the elapsed 10-year, 20-year, and 30-year bonds and the 30-year benchmark bond to enhance liquidity of treasury bonds.

The actual issuance amount in May, including competitive bidding issuance, non-competitive subscription, and exchanges, is expected to be 18.459 trillion KRW.

Accordingly, the cumulative treasury bond issuance from January to May is expected to reach approximately 81.7551 trillion KRW. However, the final issuance results may vary depending on the non-competitive subscription results for the 20-year bonds announced on the 24th.

To support smooth fiscal execution, fiscal bonds worth 8 trillion KRW (63-day maturity) will also be issued four times in June.

The issuance of fiscal bonds will be conducted through competitive bidding targeting a total of 33 institutions (excluding duplicates), including 22 monetary stabilization bond bidding institutions, 18 treasury bond primary dealers, 4 reserve treasury bond primary dealers, and 3 treasury fund management institutions.

Fiscal bonds are short-term government bonds issued in the financial market to cover temporary treasury fund shortages caused by timing mismatches between revenue and expenditure, and must be repaid within the year.