The Ministry of Finance and Economy announced on May 29 that it will issue 30 billion won in three-year fixed-rate bonds and 70 billion won in three-year compound interest bonds, along with 600 billion won in five-year bonds, 1 trillion won in ten-year bonds, and 300 billion won in twenty-year bonds, totaling 200 billion won.
The coupon rates will be based on the auction rates of similar government bonds issued in May: 3.565% for three-year bonds, 3.940% for five-year bonds, 4.295% for ten-year bonds, and 4.145% for twenty-year bonds.
The additional interest rates will be adjusted flexibly in response to recent sharp increases in the coupon rates of government bonds and overall market conditions. Consequently, an additional 0.1% will be added to the five-year bonds, 0.5% to the ten-year bonds, and 0.8% to the twenty-year bonds. No additional interest will be applied to the three-year bonds, considering the yields of financial market products.
If held to maturity, the pre-tax yields for the June-issued retail bonds will be approximately 10.7% for three-year fixed-rate bonds, 11.1% for three-year compound interest bonds, 21.9% for five-year bonds, 59.7% for ten-year bonds, and 162.6% for twenty-year bonds.
The subscription period will be from June 10 to June 16, during business hours from 9 a.m. to 4 p.m. Individual investors can apply by visiting the sales agency Mirae Asset Securities or online during this period. The minimum subscription amount is 100,000 won, with an annual purchase limit of 200 million won per person.
Additionally, retail bonds issued between June 2024 and May 2025 can be redeemed early during June. However, in this case, investors will only receive the principal and interest based on the coupon rate at the time of purchase, without benefits such as compound interest or separate taxation on interest income.
The government has been issuing retail bonds since June 2024. Each month, it announces the issuance plan for the following month, with subscriptions typically taking place during the five business days leading up to the issuance date. The Ministry of Finance and Economy issued a total of 200 billion won in retail bonds last month as well.
* This article has been translated by AI.
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