kmb Korea Money Brokerage Corp.

Fixed Income

As the first inter-dealer broker (IDB) of Korea, KMB delivers extremely efficient and prompt brokerage service in the fixed income market


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

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

Division Issuing Entity Type
Government bond Central government * Treasury bond, financial securities, national housing bonds, etc.
Local government bond Local government Local development bond, urban railway bond, waterworks bond, road bond, etc.
Special bond Special corporations established by special laws Land development bond, electricity construction bond, etc.
Financial bond Bank * Currency stabilization securities, industrial financial bond, SME financial bond, etc.
Company bond Corporations Guaranteed bond, unsecured bond, secured bond, convertible bond, bond with subscription warrant, etc.

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

Division Description
Coupon bond Bonds with coupons for interests that are given on the bond interest payment date
Discount bond 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
Compound 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).

Name of storage agency Head office Responsible areas
Euroclear Brussels, Belgium Euro bonds and foreign bonds, etc.
Clearstream Luxemburg Euro bonds and foreign bonds, etc.

Back-to-back transactions

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.

CD/Electronic short-term bonds

CD (Certificate of Deposit)

CD (Certificate of Deposit) is a blank deposit certificate issued by a bank for a term deposit.
All banks except the Export-Import Bank of Korea may issue a CD.

Monetary stabilization bond

Monetary stabilization bond is a debt security with certain conditions that are electronically registered.
More than KRW 100 million issued
Within 1 year of maturity
Full and one-time payment of issued amount
Prohibition of granting share certificate rights, and secured mortgage under the Secured Bond Trust Act