▲ This composite image symbolizes the euro currency. (Yonhap)

S Korea-euro bond

S. Korea issues FX stabilization bonds worth 1.7 bln euros

By Kang Yoon-seung

SEOUL, July 9 (Yonhap) -- South Korea's finance ministry on Thursday said it has issued euro-denominated foreign exchange (FX) stabilization bonds worth 1.7 billion euros (US$1.94 billion), reflecting the country's solid standing in the global financial market.

The Ministry of Finance and Economy said the euro bonds were issued the previous day with maturities of three and seven years, marking Seoul's largest-ever euro-denominated FX stabilization bond issuance.

The FX stabilization bonds are issued to secure foreign currency funds to help cope with external financial uncertainties.

The issuance consists of two tranches -- 700 million euros in three-year bonds carrying a yield of 2.981 percent and another 1 billion euros in seven-year bonds with a yield of 3.285 percent.

The ministry said the issuance also marked record-low spreads for both the three-year and seven-year maturities, with spreads reaching 10 basis points and 28 basis points, respectively, reflecting global investors' confidence in the South Korean economy.

"The foreign currency assets secured through the issuance of the FX bonds will serve as a strong buffer against unexpected changes in external conditions, helping maintain a resilient economy," the finance ministry said.

The finance ministry added the issuance is significant as the country confirmed strong demand for FX bonds despite growing uncertainties, including resurfacing geopolitical concerns in the Middle East.

The government said it shared its vision for South Korea's economy with major institutional investors ahead of the issuance, including the country's drive to become one of the world's top three artificial intelligence (AI) powerhouses, as well as its efforts to advance the capital market.

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