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(LEAD) S. Korea sells bonds worth US$625 mln, 700 mln euros for forex stabilization

All News 09:06 September 10, 2020

(ATTN: ADDS finance minister's remarks in paras 6-7)

SEJONG, Sept. 10 (Yonhap) -- South Korea issued bonds worth US$625 million and 700 million euros for its foreign exchange stabilization scheme, the finance ministry said Thursday.

The 10-year dollar-denominated bonds carry a yield of 1.198 percent, or 50 basis points more than U.S. Treasuries, the Ministry of Economy and Finance said in a statement.

The five-year euro-denominated bonds carry a yield of minus 0.059 percent, the ministry said.

It was the first time that a non-European nation sold euro-denominated bonds with a negative yield, the ministry said.

A negative bond yield means that an investor earns less money than the original purchase price when the bond matures.

Finance Minister Hong Nam-ki said the lowest-yielding bond sale reaffirmed foreign investors' confidence in the South Korean economy.

The government will redouble efforts to help the nation's economy recover from the fallout of the coronavirus pandemic, Hong said in a Facebook post.

The bond sale drew several times more orders than the proposed amount, according to the ministry.

Among the major buyers of the bonds are central banks and sovereign funds around the world, the ministry said.

Despite heightened economic uncertainties over the coronavirus pandemic, the bond sale showed that foreign investors trust the South Korean economy, the ministry said.

(LEAD) S. Korea sells bonds worth US$625 mln, 700 mln euros for forex stabilization - 1

kdh@yna.co.kr
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