The Ministry of Finance announced on August 20 that it will issue 500 billion won in treasury bonds through a non-competitive bidding process.
Since being included in the World Government Bond Index (WGBI) in April, demand for treasury bonds has increased. The term "treasury bonds" refers to bonds that have been newly issued while transferring benchmark status from previously issued bonds.
To enhance liquidity in treasury bonds, the government will conduct a non-competitive bidding process for these bonds. In this process, primary dealers (PDs) can bid for the amount of bonds they require based on the pre-announced issuance volume and interest rate.
The allocation of successful bids will be proportionate to the amount bid by each PD within the limits of the issuance volume for each bond type. The issuance will include four types of 20-year bonds totaling 425 billion won and one type of 30-year bond totaling 75 billion won.
A Ministry official explained, "PDs can bid in two groups based on their performance evaluations from the previous month. The first group, which includes all 20 primary dealers, will receive 60% of the planned issuance amount. The second group, consisting of the top 10 primary dealers based on their performance evaluations, will receive 40% of the planned issuance amount."
The interest rates for the bonds to be issued in August will be announced on the bond market's website on the bidding date, August 28, taking into account market conditions such as prevailing interest rates.
* This article has been translated by AI.
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