The Ministry of Economy and Finance said April 28 it plans to issue 200 billion won ($200 billion won) in retail Treasury bonds in May.
By maturity, the ministry will offer 5 billion won each in three-year coupon bonds and three-year compound-interest bonds. It will also supply 50 billion won in five-year bonds, 110 billion won in 10-year bonds and 30 billion won in 20-year bonds.
Coupon rates will be based on the winning yields for government bonds of the same maturities sold in April. The three-year bond will carry a 3.450% coupon rate, the five-year 3.530%, the 10-year 3.715% and the 20-year 3.610%. Additional rates will be added to the five-year (0.3 percentage points), 10-year (1.05 percentage points) and 20-year (1.3 percentage points) bonds. No additional rate will be applied to the three-year bond, citing recent rate increases and returns on financial products.
If held to maturity, the pretax return is expected to be about 10% for the three-year coupon bond and about 11% for the three-year compound-interest bond, about 21% for the five-year bond, about 59% for the 10-year bond and about 161% for the 20-year bond.
Subscriptions will run from May 11 to May 15. Individual investors can apply in person or online through Mirae Asset Securities, the selling agent. The minimum subscription is 100,000 won, and the annual purchase limit is 200 million won per person.
If total subscriptions are within the issuance cap, investors will receive full allocations. If subscriptions exceed the cap, up to 3 million won will be allocated equally, with the remaining amount distributed in proportion to subscription size. Allocation results will be provided on the next business day after the subscription period ends.
In May, investors will also be able to redeem early retail Treasury bonds issued from June 2024 through April 2025. In that case, they will receive only principal and interest based on the coupon rate applied at purchase, and will not receive compound interest including the additional rate or benefits such as separate taxation on interest income.
* This article has been translated by AI.
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