Korea Securities Depository Launches KOFR Floating Rate Bond Calculator

The Korea Securities Depository announced on July 22 that it will launch a service to calculate the interest rates of KOFR-based floating rate bonds, aiming to promote the use of the Korea Overnight Financing Rate (KOFR), which serves as the standard reference rate for the Korean financial market.

This KOFR floating rate bond calculator can be accessed through a dedicated website that publishes KOFR figures.

KOFR is an index that replaces the CD (Certificate of Deposit) rate, which previously served as the standard reference rate. In accordance with financial authorities' guidelines, it is set to be officially adopted in the second half of this year. The Korea Securities Depository is the institution responsible for calculating KOFR.

KOFR floating rate bonds are representative inter-institutional bonds that use this rate. However, because the interest is not set in advance but determined retrospectively, their issuance and distribution have been complicated.

Accordingly, financial institutions newly handling KOFR floating rate bonds can use this calculator to determine interest payment methods for their products and to develop and verify related systems.

A Korea Securities Depository official stated, "We have prepared this service so that the issuance of related bonds can expand in the financial sector, where KOFR is still unfamiliar." The official added, "Since April of this year, we have posted KOFR figures on the Naver and Daum portals and registered a KOFR entry in online economic glossaries, making efforts to increase public awareness of KOFR."