First subscription opens Wednesday
10-year bond carries 4.415% coupon rate
Bonus rate added for holders at maturity
NH Investment & Securities will open its first subscription for "pension individual investment government bonds" — available through defined-contribution and individual retirement pension accounts — starting Wednesday.
The subscription runs from Wednesday through Sept. 15, five business days in total, with hours from 9 a.m. to 4 p.m. on each business day. The minimum subscription amount is 100,000 won ($74), with additional subscriptions accepted in increments of 100,000 won. The bonds are issued monthly via subscription and can be applied for at branch offices, by phone, or through the company's mobile trading platforms N2 and Namu.
Two products are available for this subscription: a 10-year bond and a 20-year bond. The 10-year bond carries a coupon rate of 4.415 percent per year with a bonus rate of 0.35 percentage points, while the 20-year bond carries a coupon rate of 4.570 percent per year with the same 0.35-percentage-point bonus rate.
Investors who hold the bonds to maturity receive compound interest applied to the combined coupon and bonus rates. On a pre-tax basis, the total yield at maturity reaches approximately 59.28 percent for the 10-year bond and approximately 161.31 percent for the 20-year bond — equivalent to average annual pre-tax returns of about 5.92 percent and 8.06 percent, respectively.
Early redemption may be requested starting in the 13th month after the bond's issuance date. However, early redemption within the first year is permitted in unavoidable circumstances, such as the payment of retirement benefits or mid-term withdrawals under the Act on the Guarantee of Workers' Retirement Benefits. In such cases, the bonus rate and compound interest benefits do not apply, and only simple interest based on the coupon rate is paid.
Subscription allotments are filled in full within each bond's issuance limit. If demand exceeds the limit, all subscribers first receive a baseline allotment, with any remaining supply distributed in proportion to each subscriber's application amount.
The addition of these bonds broadens the product lineup available to NH Investment & Securities customers holding defined-contribution and individual retirement pension accounts. With government-guaranteed principal and interest now joining existing options such as deposits, bonds, ETFs and equity-linked securities, customers can build pension portfolios that balance stability and long-term returns in line with their investment goals and retirement timelines.
The bonds are expected to offer a new alternative for customers who favor long-term asset allocation strategies and seek stable management of their pension assets.
Jung Hwan, head of the pension asset management division at NH Investment & Securities, said individual investment government bonds are "a representative long-term investment product that aligns with the long-term nature of pension management." He added that the company would "continue to expand the range of product choices so that customers can manage their pension assets in more diverse ways suited to their investment horizon and retirement timeline, moving beyond deposit-centered stable management."
NH Investment & Securities has been accelerating the launch of new products. An IMA product called N2 IMA1 Mid-Term No. 3, which opened for subscriptions on Aug. 18, sold out in a single day. The product had a target fundraising goal of 120 billion won, with a scheduled closing time of 3 p.m. on Aug. 24, but subscriptions wrapped up ahead of schedule.
th5@heraldcorp.com
