The Ministry of Economy and Finance announced today (the 29th) that it plans to issue 150 billion won worth of government bonds for individual investors next month.

The issuance amounts by category are 3 billion won for 3-year coupon bonds, 7 billion won for 3-year compound interest bonds, 70 billion won for 5-year bonds, 50 billion won for 10-year bonds, and 20 billion won for 20-year bonds.

The coupon rates will apply the successful bid rates of treasury bonds of the same maturity issued this month (3.765% for 3-year bonds, 4.165% for 5-year bonds, 4.255% for 10-year bonds, and 4.530% for 20-year bonds).

Additional spreads will be added as follows: 0.05% for 5-year bonds, 0.5% for 10-year bonds, and 0.4% for 20-year bonds.

No additional spread is granted for 3-year bonds, taking into consideration the yields of financial market products and other factors.

When held to maturity, the pre-tax yields for individual government bonds issued in August will be approximately 11.3% for 3-year coupon bonds (annual average yield of 3.8%), about 11.7% for 3-year compound interest bonds (annual average yield of 3.9%), about 22.9% for 5-year bonds (annual average yield of 4.6%), about 59.1% for 10-year bonds (annual average yield of 5.9%), and about 161.8% for 20-year bonds (annual average yield of 8.1%).

The subscription period runs from the 10th to the 14th of next month.

Applications can be made by visiting branches of Mirae Asset Securities, the sales agency, or online via its website or mobile app.

The allocation results will be announced on the business day following the end of the subscription period.

Individual investors will be able to engage in early redemption of government bonds for individual investors issued between June 2024 and July 2025 during next month.

However, in such cases, investors will only receive the principal and interest based on the coupon rate applied at the time of purchase, and will not receive benefits such as compound interest including additional spreads or separate taxation on interest income.

(Photo: Yonhap News)