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S. Korea issues 50-year bonds with premium of 1.535 percent

Collected: 2016.10.03

Distributed: 2016.10.04

Source: Go Direct

South Korea’s government is issuing 1.1 trillion won ($996.4 million) worth of 50-year government bonds on Oct. 11 for the first time underscoring soaring demand for long-term safe assets amid low-interest-rate environment with aging population.

According to the Ministry of Strategy and Finance (MOSF) Friday, the nation’s first offering of 50-year papers ended in oversubscription by drawing 1.67 trillion won in total from investors seeking for annual yield of 1.4 percent to 1.6 percent. The coupon rate is set at 1.535 percent, 4 basis points higher than benchmark 10-year notes.

The government chose Kookmin Bank and nine securities firms including Daishin Securities Co., Dongbu Securities Co. as ultimate buyers of the papers.

Minister Yoo Il-ho, who doubles as deputy prime minister for economic affairs, said such overwhelming response to the sale of 50-year government debt proved strong market infrastructure, adding that the debt sale would remarkably enhance the government’s financing capabilities as well as treasury bond management.

By Lee Seung-yoon

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