Mirae Asset Securities opens subscriptions for November retail government bonds, with 200 billion won on offer

[Financial News] Mirae Asset Securities announced on the 11th that it would open subscriptions for November’s retail government bonds.
The subscription period runs for five business days, from today through the 17th. Customers with a dedicated account for retail government bonds can apply at branches nationwide or through the MAPS mobile trading system (MTS) from 9 a.m. to 4 p.m. on business days. Customers with defined-contribution (DC) or individual retirement pension (IRP) accounts can subscribe to the 10- and 20-year bonds through the retirement pension products section of the MTS, among other channels.
The total issuance for November is 200 billion won. By bond type, the offering comprises 2 billion won in three-year coupon bonds, 3 billion won in three-year compound-interest bonds, 20 billion won in five-year bonds, 140 billion won in 10-year bonds and 35 billion won in 20-year bonds. Compared with the previous month, the amounts for the five-, 10- and 20-year bonds each fell by 10 billion won, while the three-year issuance remained unchanged.
The 10- and 20-year bonds will total 175 billion won, accounting for 87.5% of the overall issuance. The company said it had allocated most of the offering to longer-term bonds, which can also be subscribed to through retirement pension accounts (DC and IRP), so they could be used for long-term asset management and pension asset management.
The November coupon rates are 3.940% for three-year bonds, 3.935% for five-year bonds, and 4.155% for both 10- and 20-year bonds. The additional rates are 0% for three-year bonds, 0.10% for five-year bonds, 0.63% for 10-year bonds and 0.79% for 20-year bonds. Compared with the previous month, the rates rose by 0.050 percentage points for five-year bonds, 0.035 percentage points for 10-year bonds and 0.360 percentage points for 20-year bonds.
If held to maturity, the pre-tax returns will be approximately 11.82% for three-year coupon bonds (an annual average of 3.94%), 12.29% for three-year compound-interest bonds (an annual average of 4.09%), 21.87% for five-year bonds (an annual average of 4.37%), 59.58% for 10-year bonds (an annual average of 5.95%) and 162.56% for 20-year bonds (an annual average of 8.12%).
Retail government bonds are savings bonds issued by the government for individual investors. Investors can buy three-, five-, 10- and 20-year bonds through a dedicated account. If bonds with maturities of five years or more are held to maturity, the combined coupon and additional rates are compounded annually. Investors can also receive separate taxation benefits on total purchases of up to 200 million won. Three-year bonds are not eligible for separate taxation.
A Mirae Asset Securities representative said, “For long-term asset management, it is important to consider both stability and returns in line with investment objectives and time horizons.” The representative added, “Retail government bonds are an investment vehicle that offers the stability of government-issued bonds and the potential for long-term compounding effects when held to maturity, and can be used according to the features of dedicated accounts and retirement pension accounts.”
[email protected] Choi Doo-seon Reporter