Mirae Asset Securities: "October Subscriptions Open for Government Bonds for Individual Investors"

Allocation for 10-year bonds increased to KRW 150 billion.

Mirae Asset Securities said on October 8 that it will open subscriptions for its October offering of government bonds for individual investors. Subscriptions will run for five business days, excluding public holidays, from October 8 through October 15.

Customers with an account dedicated to government bonds for individual investors can apply through Mirae Asset Securities branches nationwide or its mobile trading system (MTS), MAPS, from 9 a.m. to 4 p.m. on business days. Customers with DC or IRP retirement pension accounts can subscribe to the 10-year and 20-year bonds through the retirement pension products section in MAPS.

The total issuance for October is KRW 230 billion, unchanged from the previous month. By bond type, the offering comprises KRW 2 billion in 3-year coupon-paying bonds, KRW 3 billion in 3-year compound-interest bonds, KRW 30 billion in 5-year bonds, KRW 150 billion in 10-year bonds, and KRW 45 billion in 20-year bonds. Compared with September, the allocation for 10-year bonds has increased by KRW 40 billion, while those for 5-year and 20-year bonds have each decreased by KRW 20 billion. The allocation for 3-year bonds remains unchanged from the previous month.

If total subscriptions for each bond type do not exceed its issuance limit, the full amount subscribed will be allocated. If subscriptions exceed the limit, KRW 3 million will first be allocated uniformly to each subscriber, and the remaining amount will be allocated in proportion to subscription amounts.

The October coupon rates are 3.875% for 3-year bonds, 4.275% for 5-year bonds, 4.510% for 10-year bonds, and 4.520% for 20-year bonds. Additional rates of 0% for 3-year bonds, 0.05% for 5-year bonds, 0.28% for 10-year bonds, and 0.43% for 20-year bonds will apply. Accordingly, investors who hold the bonds to maturity will earn pre-tax returns of approximately 11.6% on 3-year coupon-paying bonds (an annual average of 3.9%), 12.1% on 3-year compound-interest bonds (an annual average of 4.0%), 23.6% on 5-year bonds (an annual average of 4.7%), 59.7% on 10-year bonds (an annual average of 6.0%), and 162.8% on 20-year bonds (an annual average of 8.1%).

Investor interest in government bonds for individual investors has remained steady. In September, subscriptions totaled KRW 258.5 billion, exceeding the planned issuance of KRW 230 billion and recording a subscription rate of 112%. Through September this year, cumulative subscriptions for government bonds for individual investors through Mirae Asset Securities, the sole sales agency, reached approximately KRW 2.4 trillion. Given that the total offering is KRW 1.64 trillion, the average subscription ratio stands at 1.47 to 1. This suggests that demand for investments continues among investors seeking stable, long-term options amid market volatility.

A Mirae Asset Securities representative said, "Since the introduction of retirement pension-type government bonds for individual investors in September, we have seen customer interest in managing retirement pension assets using long-term government bonds. Backed by the stability of being issued by the government, these bonds offer the potential for long-term compound returns and can be used in ways suited to the features of dedicated accounts and retirement pension accounts, making them a potential cornerstone of long-term asset management portfolios."

This content was produced with the assistance of AI translation services.