KMB has been offering inter-dealer broking services for fixed income
products since it was licensed as the first domestic IDB in February 2000.
Our consistent efforts to ensure great convenience in transactions with
lower cost of market search and high transparency and liquidity has contributed to
the robust development of the fixed income market of the country.
We keep close track of trading needs of all market participants including
domestic and foreign banks, securities companies and investment trust
companies in real time, and ensure the highest level of safety in settling
a transaction with DVP (Delivery Versus Payment) system where assets
and payments are exchanged simultaneously.
- Fixed Income
- Foreign Fixed Income
- Electronic short-term
Bonds are a sort of a certificate of loans that are issued when the government,
public institutions, special corporations and private companies in the form of corporations issue in order to procure fund
from general public investors in a relatively long term. Bonds have varying issuing conditions, forms and rights,
and therefore there are no absolute classification standards. In general, bonds are classified based on issuing entity, interest payment method, availability of securities, repayment period and recruitment method.
Classification by Issuing Entity
Korea Treasury Bond (KTB) is issued by the Bank of Korea as a financing source of the government.
The bond, issued at market interest rates, has various maturities including 1-year, 3-year, 5-year and 10-year.
Among them the 3-year KTB, backed by the highest liquidity, is used as an indicator of market rates.
Monetary Stabilization Bond (MSB) is issued by the Bank of Korea to control the money supply in the market. When there is a need to decrease the money stock, MSB is issued in the open market absorbing excess liquidity, and conversely, it is bought back when liquidity injection is needed. The bond, issued at a discount, is classified into 10 types with maturities ranging from 14 days to 546 days. The 364-day MSB is the most actively traded in the market.
Classification by interest payment method
||Bonds with coupons for interests that are given on the bond interest payment date
||Bonds issued with face values discounted to fixed interest (simple interest), where face values of bonds are given at the maturity date of the bond
||Bonds where interests are reinvested as compound interests until the maturity, and are paid the principal and interest at the time of maturity of the bond
|Simple interest bond
||Bonds where interests are calculated as simple interests until the maturity, and are paid the principal and interest at the same time at the time of maturity of the bond
Foreign Fixed Income
Foreign currency bonds are bonds indicated in foreign currency or those than are paid overseas.
We brokerage Euro bond transactions, and perform Back-to-back transactions via Euroclear and
Clearstream as International Central Securities Depository (ICSD).
Back-to-back transactions are where the initial seller owns the securities and the final seller owns the fund,
and transactions are performed without securities and fund at the brokerage between the seller and the buyer.