The bond market in the Republic of Korea is one of the largest markets in Asia. Various reforms have led to its rapid development, including gradual market liberalization. All fixed-income instruments are available to foreign investors. The Government continues to issue treasury bonds on a regular basis with maturities of 3, 5, and 10 years. The 3-year bond is the most liquid. However, due to increased issuance of 5-year maturities in 2008, it is also now included as a benchmark.

Foreign demand for longer-dated bonds led to the gradual increase of longer-term notes. In January 2006, the Republic of Korea began issuing 20-year government bonds to satisfy requests from pension funds and insurance companies. However, the Government is now planning to offer a debt exchange program to holders of longer-dated government bonds in exchange for bonds with maturities of 3 to 5 years.

Bonds in the Republic of Korea can be classified into two main types: government and corporate. The government bond market consists of treasury bonds, National Housing Bonds, and Seoul Metropolitan Subway Bonds. It also includes the central bank's monetary stabilization bonds, as well as financial debentures issued by the Korea Development Bank. Government bonds are the most traded asset class and form the basis for benchmark yields.

Securitization has become an important financing tool in the Republic of Korea since it was first used to restructure banks’ nonperforming loans following the 1997–98 Asian financial crisis. Collateralized bond obligations and collateralized debt obligations accounted for the bulk of securitized transactions. The market has since expanded to include securitization of residential mortgages, credit card receivables, future trade receivables, and various types of leases and loans.