The government of South Korea would be selling ten-year bonds to raise USD 1 billion. A source told Bloomberg that the bonds would mature in ten years. It would also carry a yield of 135 basis points more than US Treasuries that have the same maturity date. The source spoke on the condition of anonymity as the terms of the sale had not yet been finalized.

The bond sale had been arranged five months ago. However, tensions with North Korea and the announced reduction of the bond purchases by the US Federal Reserve increased borrowing costs. The offering had to be postponed.

In a phone interview with Bloomberg, South Korean Finance Ministry Director General Choi Hee Nam said that given the situation in the market, now would be the best time to sell the bonds. Rees Kam, an SJS Markets Ltd Strategist, also agreed. Kam added that once the Federal Reserve would start to taper their monetary stimulus package, borrowing costs would rise even more rapidly. "We expect solid demand for the debt given Korea's better economic fundamentals relative to other emerging markets," he said.