Press Release

Embargo: 17:00, May. 27, 2010 Release Date: 16:30, May. 27, 2010

Contact Information: KyungYong Lee : 02-2150-5132 (Government Bond Policy Division)

2010 June T

B

I

, B

, C

O

S

& MAY A

R

The Ministry of Strategy and Finance plans to issue Korea Treasury Bonds worth 5,000 billion Won in June 2010 through competitive auctions.

1) KTBs of 5,000 billion Won will be issued through competitiveauctions.

3-year KTB worth 900 billion Won scheduled to be issued on June8 (Tue)will be newly issued in "KTB ****-1306."

5-year KTB worth 1,800 billion Won scheduled to be issued on June 15(Tue)will be fungible with "KTB0450-1503."

10-year KTB worth 1,500 billion Won scheduled to be issued on June22 (Tue)will be newly issued in "KTB ****-2006."

20-year KTB worth 800 billion Won scheduled to be issued on June29 (Tue)will be fungible with "KTB0550-2912."

*Non-competitive purchasing option F/

For individual investors participating in competitive biddings, 1,000 billion Won KTBs, not more than 20% of the issuance amount planned in the competitive biddings, will be allocated first at the accepted bid rate

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2) Non-competitive purchasing option II

A non-competitive purchasing option II is granted to primary dealers (PD) whereby PDs can purchase 10% of the accepted bid amount (up to 25% for top five PDs and 15% for the next top five PDs)and then 3 additional business days is given to PDs for purchase the day after the auction is finished.

- A PD’s exercise rate for non-competitive purchasing option II is the highest accepted bid rate determined in the competitive bidding.

3) Inflation-linked Korea Treasury Bond (KTBI) Issuance

KTBI is awarded to PDs within 20% of the accepted amount of 10-year KTB and then PDs are granted the right to purchase it within 4 business days including the auction day.

- The issue rate of KTBI is acquired by subtracting spread announced by the Korea Exchange right after 10-year KTB auction from the highest accepted rate of 10-year KTB.

- 2010 June Auction Schedule -

(Unit: billion Won)

Classifi- cation

Auction

Date

Settlement

Date

Issue

Date

Amount of Issue 3-

year KTB

5- year KTB

10- year KTB

20- year KTB Nominal 6-7-2010 6-8-2010 6-10-2010 900

Nominal 6-14-2010 6-15-2010 3-10-2010 1,800

Nominal 6-21-2010 6-22-2010 6-10-2010 1,500

Nominal 6-28-2010 6-29-2010 12-10-2009 800

* Financial Support: The fund of approximately 1.0 trillion Won is scheduled to be offered in June – The fund will be provided at low interest rates if PDs present their holding KTBs as collateral.

3) Buyback and conversion offer plan

MOSF will buy back KTBs of 1 trillion Won through a buyback operation and

1. 2010 June KTB Buyback Plan

The Ministry of Strategy and Finance plans to buy back Korea Treasury Bonds worth approximately 1 trillion Won through a buyback operation in June 2010.

 (Types and Volume) Types and volume of KTBs for buyback are as follows.

Date Types of KTB Volume

June. 23, 2010 (Wed) 10:40
11:00

KTB 0500-1103 (maturity Mar 2011, 5 year) KTB 0765-1104 (maturity Apr 2011, 10 year) KTB 0550-1106 (maturity June 2011, 3 year) KTB 0691-1107 (maturity July 2011, 10year) KTB 0475-1109 (maturity Sept 2011, 5 year) KTB 0662-1110 (maturity Oct 2011, 10 year) KTB 0475-1112 (maturity Dec 2011 , 3 year)

1 trillion Won*

Details will be announced on the website of the Bank of Korea on June. 18.

 (Anticipatory effect)

The efficiency of the government bond market is expected to improve by purchasing off-the-run KTBs whose trading is not active in the secondary market.

In addition, the buyback operation will mitigate roll-over risk by spreading maturity dates, and contribute to the stabilization of the market.

2. 2010 June KTB Conversion Offer Plan

The Ministry of Strategy and Finance plans to conduct a conversion offer for Korea Treasury Bonds worth 500 billion Won on June. 17, 2010 (Thr).

● Conversion offer date and time 10:4011:00, June. 17, 2010 (Thr)

● Volume : 500 billion Won

● Types of KTB

KTB for issue KTB for purchase

KTB oooo-1306

(maturity 2013.6.10, 3 year)

KTB 0525-1303 (maturity 2013.3.10, 5 year) KTB 0500-1303 (maturity 2013.3.26, 10 year) KTB 0575-1309 (maturity 2013.9.10, 5 year) KTB 0475-1309 (maturity 2013.9.17, 10 year)

● Date of conversion offer and settlement : 15:50, June 21, 2010 (Mon)

Details will be announced on the website of the Bank of Korea on June 14.

 (Anticipatory effect) Off-the-run KTBs of low liquidity are exchanged for newly- issued KTBs of high liquidity, which will lead to facilitating trading government bonds.

* Non-benchmark KTBs are rarely traded in the market and therefore have very low liquidity. In contrast, newly-issued KTBs are traded actively as a benchmark bond that sets investment criteria.

Korea Treasury Bonds worth 6,883 billion Won were issued in May 2010.

< 2010 May KTB Auction Result >

(unit: billion Won,%)

Classification

Competitive bidding

Non-competitive purchasing

option

Conversion offer (C)

Total (A+B+C) Auction

date

Issue (planned)

Issue vol.

(weighted avg.

accepted rate,%)

(A)

Period

Issue volume

(B)

3 year KTB

(KTB 0425-1212) ’10.5.3 1,100 1,300

(3.67) ’10. 5.3~5.7 62 - 1,362

5 year KTB

(KTB 0450-1503)’10.5.10 1,650 1,924

(4.43) ’10..5.10~5.13 114 526*- 2,564

10 year KTB

(KTB 0575-1809)’10.5.17 1,500 1,700**

(5.05) 10..5.17~5.20 262 1,962

20 year KTB

(KTB 0550-2912)’10.5.24 800 938**

(5.22) ’10.5.24~5.27 56 995

Total 5,050 5,863 494 526 6,883

* The conversion offer for KTBs worth 526 billion Won was conducted on May 20, 2010

** 610 million Won is included for allocating first to individual investors (non-competitive purchasing option ^)