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Dollar-denominated bonds worth US$1 billion sold.

The government has successfully sold 10-year dollar-denominated bonds worth US$1 billion on September 5. It was the first sale of dollar-denominated bonds since April 2009. The bond sale, which is intended to refinance 10-year treasuries that matured on June 1, took place at a spread of 115 basis points above the equivalent US Treasury note. The coupon rate dropped into the 3 percent range for the first time, registering at 3.875 percent. The rates were low compared to bonds issued by local public institutions or countries with similar credit ratings.

Global investors from Asia, Europe, the US and other regions showed avid interest in Korean Treasury bonds, with around 200 financial institutions participating in the bidding, including central banks of major countries, sovereign wealth funds and large asset management firms. The successful sale of 10-year dollar-denominated bonds was a vote of confidence in the Korean economy, which remains exceptional compared with other emeging countries owing to its strong macroeconomic fundamentals in the face of growing international uncertainties, such as talk in the US regarding stimulus measures, financial market volatility in emerging countries and concerns over Syria.

<Previous sales of dollar-denominated bonds>

                               1998          May 2003   Sep 2004

Maturity (year)           5          10         10         10
Amount (US$ billion)      1          3          1          1
Issue rate (%)          8.952      9.083      4.306      4.965
Coupon rate (%)         8.750      8.875      4.250      4.875

                       Oct 2005   Dec 2006        Apr 2009

Maturity (year)           20         10         5          10
Amount (US$ billion)     0.4        0.5        1.5        1.5
Issue rate (%)          5.740      5.178      5.864      7.260
Coupon rate (%)         5.625      5.125      5.750      7.125
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Title Annotation:Economic News Briefing
Publication:Economic Bulletin (Korea)
Article Type:Brief article
Geographic Code:9SOUT
Date:Sep 1, 2013
Words:274
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