South Korea will start selling some government bonds specifically to individuals from next year, seeking to widen the pool of investors for a market that underpins the nation’s financial stability.
(Bloomberg) — South Korea will start selling some government bonds specifically to individuals from next year, seeking to widen the pool of investors for a market that underpins the nation’s financial stability.
Bonds with 10- and 20-year maturities are scheduled to go on sale as part of a plan to help individuals secure safer assets, according to a statement released Tuesday from the Finance Ministry. About 1.2% of government bonds are currently held by retail investors.
They will be issued on the 20th day of every month except December and mirror programs in developed nations such as the US and the UK, offering more options for individuals as they plan for retirement, the ministry said. Korea has one of the world’s fastest-aging populations.
Italy is among the European governments pitching public debt to mom and pop investors as central banks wind down their bond-buying programs. Pandemic-era spending has left many countries with swollen national debt loads.
Read More: Europe’s Yield-Hungry Everyday Savers Snap Up Government Bonds
Investors will be required to purchase at least 100,000 won ($75.6) of debt and can buy up to 100 million won a year. Once purchased, the bonds cannot be transferred to other individuals except under extraordinary circumstances and each investor will only be allowed one account, the ministry said. The bonds can be redeemed at any time after a year of holding, the ministry added.
The process will be handled by Korea Securities Depository rather than the Bank of Korea.
–With assistance from Seyoon Kim.
(Adds reference to Italian bond-buying program. An earlier version of this story was amended to give the correct limit on annual purchases.)
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