S. Korea considers issuing 50-yr treasury bonds

REUTERS: South Korea is considering issuing 50-year treasury bonds, the finance ministry said yesterday, a move that would be unprecedented as the country’s bond maturities now run up to 30 years. In a statement, the finance ministry said it was considering the new issuance because of the prolonged low interest rate environment and the fact that yield gaps between short and long-term treasury bonds were becoming smaller.

As of Aug. 12, the yield gap between South Korea’s 3-year and 30-year treasury bonds stood at 25 basis points, compared with 141 basis points in the U.S. between the same bond maturities, according to the finance ministry.
The decision on the size and timing of the issuance, should it be decided, will be confirmed after talks with market participants sometime in August, the ministry said.

South Korea first started issuing the 30-year paper in September 2012 and it has seen stable demand since.
Currently, nine countries issue treasury bonds with maturities of 50 years 
or longer.