Korea to Invest $2 Bil. in Merrill Lynch

The state-run Korea Investment Corporation (KIC) said Tuesday that it has decided to make an equity investment worth $2 billion in Merrill Lynch, one of the world's leading investors.

"The investment will acquire the U.S. investment bank's preferred stocks with a 9-percent dividend per annum, and the stocks will be converted into ordinary ones 33 months after the investment, allowing us to hold an over 3 percent stake in Merrill Lynch," a KIC official said.

The investment is part of $10 billion that the Ministry of Finance and Economy consigned to the KIC to manage at the end of last year, the official said.

The Korean government set up the KIC in July 2005 to manage part of the country's foreign exchange reserve and public funds.