The Ministry of Economy and Finance announced on the 26th that it successfully issued euro-denominated foreign currency stabilization fund bonds worth €1.4 billion (2.2 trillion won).
The euro bond issuance is the largest in history since 2021, marking the first issuance in four years. This euro-denominated foreign currency stabilization fund bond was issued in two tranches of €700 million each, with maturities of 3 years and 7 years, respectively. It was the first issuance with multiple maturity structures in euro terms.
The additional charges are 0.25 percentage points for the 3-year bond and 0.52 percentage points for the 7-year bond. The Ministry of Economy and Finance noted that, "given the recent market conditions, these are at a low level" and added, "Korean corporations and financial institutions that use the maturity and interest rates of the foreign currency stabilization fund bond as benchmarks will likely be able to offer improved conditions in future foreign currency procurement."
According to the Ministry of Economy and Finance, the order volume for this euro-denominated foreign currency stabilization fund bond reached €19 billion, the highest ever. The order amount compared to the issuance amount (order ratio) also hit a record high of 13.6 times.
The Ministry of Economy and Finance stated, "Major investors showed high interest in the resolution of political uncertainty in Korea in an orderly manner and the new government's pragmatic market-oriented policies, as well as the concentration on nurturing new industries in artificial intelligence (AI)," adding that it confirmed the confidence and expectations of the international community and global investors in our economic system and the new government's policy direction.
It also said, "In a situation where uncertainties in the external institutional sector are increasing, we were able to timely expand our foreign reserves and secure resources for this year's repayment of the foreign currency stabilization fund bonds early."
Meanwhile, the government plans to issue additional foreign currency stabilization fund bonds in the second half of the year within the remaining issuance limit of $1.9 billion.