Here are some key facts about the market:

Asia's second largest after Japan and the largest among emerging markets, with the value of listed bonds outstanding at 246 trillion won ($175 billion) as of April 1998.

Bonds are traded on the Korea Stock Exchange or through the over-the-counter KOSDAQ market. About 97 per cent of all trading is done through KOSDAQ.

KOSDAQ deals in listed and unlisted bonds, with cash transactions only and no restrictions on trading volume or bid-ask units.

Brokerage commission rates are around 0.3 per cent of the transaction value.

Three types of bonds are traded: government bonds,special public bonds and corporate bonds.

Government bonds include Foreign Exchange Stabilisation Fund Bonds, Monetary Stabilisation Bonds and treasury bills. These are mainly used to absorb liquidity,especially in times of current account surpluses.

Total capital raised through the bond market in 1997 amounted to 113.1 trillion won: 78.8 trillion in government and public debentures and 34.3 trillion in corporate bonds. MSBs accounted for 31.2 trillion.

Most foreign investment has gone into MSBs.

The Korea Stock Exchange started from June issuing yield data for the most liquid issues, the National Housing Bond Class One giving the market a benchmark yield curve for the first time.

Most government and public bonds are not sold at market determined prices and are distributed to financial institutions.

The underwriting consortium usually absorbs most of the government bond issues because the bonds are difficult to sell to the general public. More than 90 per cent of corporate bonds issued during the past eight years had maturities of less than five years.

The vast majority of corporate bonds are issued in the form of fixed-rate coupon bonds which are guaranteed by financial or otherinstitutions. Convertibile bonds, however, have become more popular in recent years.

The secondary market is underdeveloped. The turnover ratio -- trading volume to bonds outstanding -- has been 30-60 per cent the past five years. Credit rating agencies rate corporate issues, but ratings are not that crucial, since most bonds are guaranteed both for principal and interest.