S. Korea issues $3 bil. of FX stabilization bonds

The Ministry of Economy and Finance at the Sejong Government Complex / Yonhap

South Korea has successfully issued $3 billion worth of foreign exchange stabilization bonds, the biggest single issuance since 2009, the finance ministry said Friday.

The issuance consists of two tranches — $1 billion in three-year bonds and $2 billion in five-year bonds, according to the Ministry of Economy and Finance.

The issuance represents the largest single-bond offering to bolster foreign exchange reserves since 2009, the ministry said.

The ministry noted that the spreads over comparable U.S. Treasury yields were 9 basis points for the three-year bonds and 12 basis points for the five-year bonds.

The three-year bonds were issued for the first time to retail investors amid rising demand for short-term bonds, the ministry said, adding that it also was the first time the spread has fallen to a single-digit level.

The five-year spread has also fallen rapidly, from 24 basis points in 2024 to 17 basis points in October, and further to 12 basis points this time.