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Insolvent North Korean bonds worth W400 billion (US$1=W946) are finding favor with international traders. Denominated in Swiss francs and German marks, the 13-year bonds maturing March 12, 2010 are being traded on major international financial markets like New York and London.
North Korean bonds were valued at less than 10 cents per dollar five or six years ago, but since the six-way nuclear deal was reached in Beijing last month they have surged on expectations that the North Korean economy will gather steam.
According to a London finance insider, some investors are purchasing the North Korean bonds with the expectation that the South Korean government will repay them in the end.
Another London financier said that possessors of North Korean bonds are mostly medium or large-sized funds pursuing long-term investments. International investors share the view that South Korea, whose foreign reserves are 10 times larger than North Korea¡¯s foreign debts, will repay them when the bonds mature, he added.
(englishnews@chosun.com )
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