Press Release

Embargo: 17:00, May 26, 2011 Release Date: 16:00, May 26, 2011

Contact Information: SangHyun Kwak : 02-2150-5132 (Government Bond Policy Division)

2011 JUNE T

B

I

, B

, C

O

P

& MAY A

R

The Ministry of Strategy and Finance plans to issue Korea Treasury Bonds worth 6,000 billion Won in June 2011 through competitive bidding.

1) KTBs of 6,000 billion Won will be issued through competitivebidding.

3-year KTB worth 1,700 billion Won scheduled to be issued on June 9(Thr)will be newly issued in “KTB****-1406.”

5-year KTB worth 1,600 billion Won scheduled to be issued on June 14(Tue)will be fungible with "KTB0400-1603."

10-year KTB worth 1,900 billion Won scheduled to be issued on June 21(Tue)will be newly issued in “KTB****-2106.”

20-year KTB worth 800 billion Won scheduled to be issued on June28 (Tue)will be fungible with "KTB0475-3012."

- 2011 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 6-7-2011 6-9-2011 6-10-2011 1,700

Press Release

2)Non-competitive purchasing option F/

For individual investors participating in competitive bidding, 1,200 billion Won KTBs, not more than 20% of the offering amount in the auction, will be allocated first at the highest accepted bid rate.

3) 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 closed.

- A PD’s exercise rate for non-competitive purchasing option II is the highest accepted bid rate determined by the multi-price auction method.

4) Inflation-linked Korea Treasury Bond (KTBi) Issuance

PDs & PPDs are granted the right to purchase KTBi up to 25% of the accepted amount of 10-year KTB within 4 business days including the auction day.

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

* Financial Support: A fund of approximately 1 trillion Won will be offered inJune

– The fund will be provided at low interest rates if PDs present their holding KTBs as collateral.

5) Buyback and Conversion Offer Plan

MOSF will buy back KTBs of 2.5 trillion Won through two buyback operations and conduct a conversion offer for KTBs of 500 billion Won in June 2011. For details, refer to Appendix 1.

* Appendix 1: 2011 June KTB Buyback and Conversion Offer Plan Appendix 2: 2011 May Treasury Bond Auction Result

Appendix 1 ’2011 June KTB Buyback & Conversion Offer Plan

1. 2011 June KTB Buyback Schedule

The Ministry of Strategy and Finance plans to buy back Korea Treasury Bonds worth approximately 2.5 trillion Won through two buyback operations in June 2011.

 (Types and Amount) Types and amount of KTBs for buybacks are as follows.

Buyback Date Types of KTB Amount

June. 9, 2011 (Thr ) 10:40
11:00

KTB 0525-1303 (maturity Mar 2013, 5 year) KTB 0575-1309 (maturity Sep 2013, 5 year) KTB 0475-1403 (maturity Mar 2014, 5 year) KTB 0425-1409 (maturity Sep 2014, 10year) KTB 0500-1409 (maturity Sep 2014, 5 year)

1.0 trillion Won

June. 28, 2011 (Tue) 10:40
11:00

KTB 0475-1109 (maturity Sep 2011, 5 year) KTB 0475-1112 (maturity Dec 2011, 3 year) KTB 0475-1203 (maturity Mar 2012, 5 year) KTB 0400-1206 (maturity June 2012, 3year)

1.5 trillion Won

Details will be announced on the website of the Bank of Korea on June. 3, and June 23, respectively.

 (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. 2011 June KTB Conversion Offer Schedule

The Ministry of Strategy and Finance plans to conduct a conversion offer for Korea Treasury Bonds worth 500 billion Won on June. 16, 2011 (Thr).

● Conversion offer date and time 10:4011:00, June. 16, 2011 (Thr)

● Amount : 500 billion Won

● Types of KTB

KTB for issue KTB for purchase

KTB 0300-1312

(maturity 2013.12.10, 3year)

KTB 0525-1303 (maturity 2013.3.10, 5 year) KTB 0575-1309 (maturity 2013.9.10, 5 year) KTB 0475-1403 (maturity 2014.3.10, 5 year) KTB 0425-1409 (maturity 2014.9.10, 10 year) KTB 0500-1409 (maturity 2014.9.10, 5 year)

● Delivery and settlement date : 15:50, June 20, 2011 (Mon)

Details will be announced on the website of the Bank of Korea on June 13.

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

Appendix 2 ’2011 May Korea Treasury Bond Auction Result

Korea Treasury Bonds worth 7,457 billion Won were issued in May 2011.

< 2011 May Nominal 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 Amt.

(weighted avg.

accepted rate,%)(A)

Period

Issue amount

(B) 3 year KTB

(KTB 0300- 1312)

’11.5.2 1,500 1,500 (3.78)

’11.5.2

~5.6 187

560 (KTB 0300-

1312)

2,247

5 year KTB (KTB 0400-

1603)

’11.5.9 2,000 2,000 (4.09)

’11.5.9

~5.13 345 2,345

10 year KTB (KTB 0500-

2006)

’11.5.16 1,600 1,600 (4.37)

’11.5.16

~5.19 236 1,836

20 year KTB (KTB 0475-

3012)

’11.5.23 900 900 (4.45)

’11.5.23

~5.26 129 1,029

Total 6,000 6,000 897 560 7,457

< 2011 May KTBi Auction Result >

(unit: billion Won) Issue

period

Issue (planned)

Issue rate(%)

Issue amount(A)

Conversion offer (B)

Total (A+B) 10 year KTBi

(KTBi0275- 2006)

’11.5.16

~5.19 393 1.40 - - -