South Korea’s sovereign and government-guaranteed debt issuance is set to reach 287.7 trillion won ($208.5 billion) next year, up 20.2 trillion won, or 7.6%, from 267.5 trillion won this year. The increase is intensifying concerns about a potential supply glut and higher interest rates, with three-year Korean Treasury bond yields already exceeding 4% for the first time since November 2023. Sovereign bond supply is projected at 238.1 trillion won, including 222.8 trillion won of Treasury bonds and 15.3 trillion won of national housing bonds, slightly below this year’s 239.8 trillion won. Government-guaranteed debt, treated by markets as broadly comparable to sovereign debt, is expected to rise to 49.6 trillion won from 27.7 trillion won. A Future Response Fund scheduled to launch next year could accumulate more than 100 trillion won in idle cash, and iM Securities analyst Kim Myung-sil estimates that 25 trillion won to 26 trillion won could be invested in Korean Treasury bonds if 35% of the fund’s projected average assets is allocated there. Samsung Electronics and SK Hynix are also being discussed as potential buyers because they need to manage surplus cash accumulated during the semiconductor boom. However, some market participants question whether issuing bonds at yields of around 4% while directing fund cash into those bonds would be efficient, compared with reducing issuance or repaying existing government debt.