Finance ministry expands individual bond issuance to retirement accounts

The finance ministry said Thursday it will issue 230 billion won ($167 million) in individual investor government bonds in September, expanding the monthly volume by 80 billion won to accommodate demand from newly eligible retirement pension accounts.

Starting this month, individuals holding defined contribution or individual retirement pension accounts can directly purchase 10-year and 20-year bonds through designated banks and securities firms.

The September offering includes 2 billion won in three-year coupon bonds, 3 billion won in three-year compound interest bonds, 50 billion won in five-year bonds, 110 billion won in 10-year bonds, and 65 billion won in 20-year bonds. Interest rates will match the winning bid rates from August issuances, with additional spreads of 0.1 percentage point for five-year bonds and 0.35 percentage point for both 10-year and 20-year maturities. The ministry expects pre-tax returns at maturity to reach approximately 5.9% annually for 10-year bonds and 8.1% for 20-year bonds.

Investors must hold retirement pension accounts at Shinhan Bank, Hana Bank, NH Nonghyup Bank, Mirae Asset Securities, Samsung Securities, Korea Investment Securities, KB Securities, or NH Investment Securities to access the new purchasing route. Applications will be accepted from September 9 to September 15 during business hours via branch visits or online platforms. If total subscriptions exceed the monthly limit for any specific maturity, allocations will be made proportionally after guaranteeing a baseline amount of 3 million won per applicant.