Government Issues 150 Billion KRW of Popular 10-Year Individual Treasury Bonds

July Private Investor Treasury Bonds Issuance of 200 Billion KRW
20-Year Bonds Reduced to 50 Billion KRW Issuance

The Ministry of Economy and Finance announced on the 28th that it will issue a total of 200 billion KRW in government bonds for individual investors in July, including 150 billion KRW in 10-year bonds and 50 billion KRW in 20-year bonds.

The coupon rate will be based on the winning bid rates of government bonds of the same maturity issued this month (3.275% for 10-year bonds, 3.220% for 20-year bonds). The additional margin will be set at 0.15% for 10-year bonds and 0.30% for 20-year bonds, considering market conditions.

Government bonds for individual investors are bonds issued with purchase eligibility restricted to individuals. They were first issued this month with 100 billion KRW each for 10-year and 20-year maturities to expand the demand base for government bonds and provide the public with a stable investment option.

While the 10-year bonds were popular with a competition rate of 3.49 to 1, the 20-year bonds fell short of the target volume, leading to an increase in the 10-year bond issuance in July.

If held until maturity, government bonds for individual investors offer benefits including the application of compound interest annually on the coupon rate and additional margin. Additionally, interest income up to 200 million KRW is subject to a separate tax rate of 14%.

However, unlike general government bonds that can be traded in the market, government bonds for individual investors cannot be transferred to others or used as collateral such as pledge rights.

They can be purchased after opening a dedicated account (one account per person) at Mirae Asset Securities, the sales agency. The minimum purchase unit is 100,000 KRW, and purchases can be increased in multiples of 100,000 KRW. The annual purchase limit is 100 million KRW. The subscription period is from the 12th to the 16th of next month.