Press Release

(1)

MINISTRY OF STRATEGY AND FINANCE

Embargo: 17:00, October 28, 2010 Release Date: 16:00, October 28, 2010

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

2010 NOVEMBER T

REASURY

B

OND

I

SSUANCE

, B

UYBACK

S

CHEDULE

& OCTOBER A

UCTION

R

ESULT

The Ministry of Strategy and Finance plans to issue Korea Treasury Bonds worth 3,500 billion Won in November 2010 through competitive bidding.

1) KTBs of 3,500 billion Won will be issued through competitivebidding.

3-year KTB worth 600 billion Won scheduled to be issued on November 2(Tue)will be fungible with "KTB0375-1306."

5-year KTB worth 1,200 billion Won scheduled to be issued on November 9(Tue)will be fungible with "KTB0400-1509."

10-year KTB worth 1,100 billion Won scheduled to be issued on November 16(Tue)will be fungible with "KTB0500-2006."

20-year KTB worth 600 billion Won scheduled to be issued on November23 (Tue)will be fungible with "KTB0550-2912."

- 2010 November 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 11-1-2010 11-2-2010 6-10-2010 600

Nominal 11-8-2010 11-9-2010 9-10-2010 1,200

Nominal 11-15-2010 11-16-2010 6-10-2010 1,100

Nominal 11-22-2010 11-23-2010 12-10-2009 600

Press Release

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MINISTRY OF STRATEGY AND FINANCE

2)Non-competitive purchasing option F/

For individual investors participating in competitive bidding,700 billion Won KTBs, not more than 20% of the offering amount in the auction, will be allocated first at the 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 are granted the right to purchase KTBi up to 20% 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 1.0 trillion Won will be offered inNovember – The fund will be provided at low interest rates if PDs present their holding KTBs as

collateral.

5) Buyback plan

MOSF will buy back KTBs of KRW 3.0 trillion through two buyback operations in November 2010. For details, refer to Appendix 1.

* Appendix 1: 2010 November KTB Buyback Schedule

Appendix 2: 2010 October Korea Treasury Bond Auction Result

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MINISTRY OF STRATEGY AND FINANCE Appendix 1 ’2010 November KTB Buyback Schedule

1. 2010 November KTB Buyback Schedule

The Ministry of Strategy and Finance plans to buy back Korea Treasury Bonds worth approximately 3.0 trillion Won through two buyback operations in November 2010.

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

Buyback Date Types of KTB Amount

Nov. 10, 2010 (Wed) 10:4011:00

KTB 0500-1103 (maturity Mar 2011, 5 year) KTB 0550-1106 (maturity June 2011, 3 year) KTB 0475-1109 (maturity Sept 2011, 5 year) KTB 0475-1112 (maturity Dec 2011 , 3 year) KTB 0712-1201 (maturity Jan 2012, 10 year) KTB 0475-1203 (maturity Mar 2012, 5 year) KTB 0728-1204 (maturity Apr 2012 ,10 year)

1.5 trillion Won

Nov. 24, 2010 (Wed) 10:4011:00

KTB 0500-1103 (maturity Mar 2011, 5 year) KTB 0550-1106 (maturity June 2011, 3 year) KTB 0475-1109 (maturity Sept 2011, 5 year) KTB 0475-1112 (maturity Dec 2011 , 3 year) KTB 0712-1201 (maturity Jan 2012, 10 year) KTB 0475-1203 (maturity Mar 2012, 5 year) KTB 0728-1204 (maturity Apr 2012 ,10 year)

1.5 trillion Won

Details will be announced on the website of the Bank of Korea on Nov. 5, and Nov. 19, 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.

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MINISTRY OF STRATEGY AND FINANCE

Appendix 2 ’2010 October Korea Treasury Bond Auction Result

Korea Treasury Bonds worth 3,924billion Won were issued in October 2010.

< 2010 October 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 0375-

1306)

’10.10.4 600 600

(3.27) ’10..10.4~10.7 - - 600

5 year KTB (KTB 0400-

1509)

’10.10.11 1,200 1,200

(3.64) ’10..10.11~10.14 235 - 1,435 10 year KTB

(KTB 0500- 2006)

’10.10.18 1,100 1,100

(3.97) 10..10.18~10.21 - 1,100 20 year KTB

(KTB 0550- 2912)

’10.10.25 600 700*

(4.47) ’10.10.25~10.28 700

Total 3,500 3,600 235 - 3,835

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

< 2010 October 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)

’10.10.18~

10.21

220 1.57 89 - 89