S. Korea's ABS Issuance Up 22.5 Pct

The issuance of asset-backed securities (ABS) in South Korea rose 22.5 percent year-on-year in the first half as floating of home loan-backed securities increased, the Financial Supervisory Service (FSS) said Wednesday.

According to the FSS, the ABS issues reached 11.2 trillion won (11.1 billion U.S. dollars) in the January-June period, up 2.1 trillion from the same period a year ago.

In the first half, the issuance of mortgage-based securities (MBS) sharply increased compared with a year earlier as the state- run Korea Housing Finance Corp. extended more mortgage loans and local banks briskly floated overseas MBS, the FSS said in a statement.

The state-run Korea Housing Finance provides long-term mortgages with a maturity of 10 years or more and issues securities based on such lending.

According to the financial watchdog, the total floating of home loan-backed securities stood at 4.45 trillion won in the first half, compared with 2.45 trillion won a year earlier.

The FSS said the issuance of MBS is expected to increase in the remainder of the year due to people's preference of home-backed loans with fixed interest sold by the state-run agency amid unstable global and domestic financial market conditions.

Local banks are also expected to aggressively seek to float overseas MBS in a bid to diversify their long-term funding sources,  it added.

Source: CRIEnglish