TREASURY BOND ISSUANCE PLAN, JANUARY 2019

The Ministry of Economy and Finance plans to issue Korea Treasury Bonds worth approximately 7,300 billion won in January 2019 through competitive bidding.

1) KTBs worth 7,300 billion won will be issued through competitive bidding.

3-year KTBs worth 1,600 billion won scheduled to be issued on January 3 (Thur) will be fungible with KTB02000-2112.

5-year KTBs worth 1,400 billion won is scheduled to be issued on January 8 (Tue). Among the issued amount, KTB worth 800 billion won will be fungible with KTB02250-2309. Among the issued amount, KTB worth 600 billion won will be newly issued with KTB00000-2403(pre-issuance).

10-year KTBs worth 1,800 billion won scheduled to be issued on January 15 (Tue) will be fungible with KTB02375-2812.

20-year KTBs worth 700 billion won scheduled to be issued on January 22 (Tue) will be fungible with KTB02375-3809.

30-year KTBs worth 1,800 billion won scheduled to be issued on January 4 (Fri) will be fungible with KTB02625-4803.

* Auction time: 10:40 a.m. to 11:00 a.m. of the auction day (auction time for KTBs to be pre-issued is 9:40 a.m. to 10:00 a.m.).

2) Non-competitive purchasing option I

For retail investors participating in competitive bidding, KTBs worth 1,460 billion won (not more than 20% of the offering amount in the auction) will be allocated first at the highest accepted bid rate.

3) Non-competitive purchasing option II

A non-competitive purchasing option II is granted to primary dealers (PD) whereby PDs can purchase differentially 5%-30%* of the accepted bid amount and then 3 business days are provided for PDs to make an additional purchase after the auction (excluding 50-yr KTB).

* The option is granted up to 20% for the top-performing PDs, 15% for the 2nd best-performing PDs, 10% for the 3rd best-performing PDs, and 5% for the rest, based on their market-making performances for the second half of 2017. MOEF will grant additional 10%p to best performing PDs in the monthly evaluation.

4) Non-competitive purchasing option III

KTBs subject to separate interest and principal are regularly supplied in the amount up to 160 billion won (210 billion won for over 10-yr KTBs) for each maturity period. PDs that have obtained the right to purchase these KTBs can make purchases up to 20 billion won.

* On the 3rd business day after the auction, the option is granted in an order reflecting the outcomes of the monthly evaluation conducted in the previous month, and PDs have to meet the obligations of separating interest and principal for their purchases between the first business day and the last business day of the next month.

5) Inflation-linked Korea Treasury Bond (KTBi) Issuance

KTBi underwriting right is granted to PDs differentially within 10% of the scheduled issue amount of KTBi worth 100 billion won, which can be exercised from 14:30 to 15:30 on the auction date of 10-year KTBs.

* For the amount still available after the bidding, it will be allocated by the unit of one billion won to the PDs based on the allocation rules, such as their bidding amount.

Non-PDs & Non-PPDs (individual investors) can purchase KTBi worth up to 10 billion won (up to 10% of scheduled issue amount of KTBi in the month) only through PDs from the notice date for the 10-year KTB auction to the 1st business day after the auction date.

*KTBi interest rate spread will be adjusted to the average rate of spread for the five business days before the competitive bidding of 10-year KTBs.

6) Buy-back

The MOEF will conduct one buy-back worth 1,000 billion won in total.

7) Conversion offer

The MOEF will conduct two conversion offers worth 200 billion won in total

Source: Ministry of Strategy and Finance

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