S. Korea’s mortgage-backed securities issuance falls in H1

SEOUL, July 29 (Xinhua) — South Korea’s issuance of mortgage-backed securities (MBS) fell in double digits for the first six months of this year due to a decrease in the government-backed mortgage loans, financial watchdog data showed Monday.
The sale of MBS, issued by the state-run Korea Housing Finance Corp. to securitize mortgage loans, amounted to 11.4 trillion won (8.3 billion U.S. dollars) in the January-June period, down 35.3 percent compared with the same period of last year, according to the Financial Supervisory Service (FSS).
The double-digit fall was attributable to reduced government-backed mortgage loans, affected by high interest rates and massive household debts.
The country’s central bank left its key rate unchanged at 3.50 percent since January last year.
The issuance of asset-backed securities (ABS), including MBS, stood at 27.5 trillion won in the first half of the year, down 8.2 percent from a year earlier.
ABS refers to securities based on such assets as mortgages, non-performing loans (NPL), credit card receivables and installment receivables.
ABS issuance by financial firms surged 40.6 percent over the year to 12.3 trillion won in the first half of the year due to the expanded issuance based on credit card receivables and NPL.
ABS sale by industrial companies grew 5.6 percent to 3.8 trillion won in the six-month period on higher issuance based on mobile phone installment receivables.
The outstanding ABS issuance came in at 257.2 trillion won at the end of June, up 7.9 percent from a year earlier. (1 won equals 0.00072 U.S. dollars) ■