Press Release

MINISTRY OF STRATEGY AND FINANCE

www.mosf.go.kr

Embargo: 16:30, June 19, 2018 Release Date: 17:00, June 19, 2018

Contact Information: Park Sung Chang (044-215-5131/ Government Bond Policy Division)

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The Ministry of Strategy and Finance plans to issue 50-year Korea Treasury Bonds worth approximately 500 billion won on June 21, 2018 through a Dutch auction.

Taking into account continued demand for ultra-long tenor bond and fiscal stability, the Ministry will issue 50-yr KTBs of 500 billion won in the second quarter of this year.

* The 50-yr KTB worth 325 billion won was successfully issued in the first quarter of 2018 (on March 15).

Before the second issuance of 50-yr KTB, the investors council was formed. The Ministry has closely discussed with the council consisting of end-users of the longer-term bonds, such as life insurance companies and indemnity insurance companies.

Also, the Ministry conducted market research to assess end-users’ demand (27 insurance companies, from June 11 to 18).

Successful issuance of 50-year KTBs will

- reduce refinancing risks, as longer-term bonds lengthen the time to maturity. This will support greater fiscal stability.

- help insurers use the securities to match their long-term liabilities, with the adoption of IFRS17^* in 2021.

* IFRS17 is a new accounting standard issued by the International Accounting Standards Board (IASB). Under IFRS17, the liabilities of insurers will be calculated based on market value, instead of book value, when a contract comes into effect, creating larger asset-liability duration mismatches.

The auction date is scheduled to be on Thursday, June 21, and the winning rate is determined in a Dutch auction.

Press Release