The country will issue its first Australian dollar-denominated forex bonds. Shown are the buildings of financial and bond companies in the Yeouido financial district of Seoul's Yeongdeungpo-gu District. (Aisylu Akhmetzianova)
By Aisylu Akhmetzianova
The country will issue Australian dollar-denominated foreign exchange stabilization bonds for the first time.
The Ministry of Economy and Finance on Nov. 8 selected ANZ, Mizuho and Nomura as the agencies for the issuance of forex bonds denominated in the Australian dollars worth up to AUD 450 million (USD 300 million) this year.
Though these bonds, the plan is to expand the global investment base for domestic bonds. The issuance is part of the government's intent to seek new investment demand, given greatly improved conditions following the nation's entry into the World Government Bond Index.
Many long-term investors such as pensions of universities and faculties and global asset managers have shown interest in Korean bonds. If they are issued, domestic companies are expected to more easily attract Australian investment.
Following last year's Japanese yen-denominated bonds, the new AUD-based issuance is part of Seoul's bid to expand its means to secure foreign currency.
The new bonds are expected to further boost the core function of forex bonds by setting a benchmark rate to enable domestic companies and financial institutions to secure foreign exchange in AUD at more favorable interest rates, a ministry news release said.
