S. Korea's ABS sales up 4.2 pct in 2008

SEOUL, Feb. 17 (Yonhap) -- The annual sales of asset-backed securities (ABS) in
South Korea climbed in 2008, snapping a two-year decrease, as credit providers
stepped up issuing such debts to meet increased credit demand, the financial
watchdog said Tuesday.
The total amount of ABS issuances reached 20.6 trillion won (US$14.4 billion)
last year, up 4.2 percent from a year earlier, the Financial Supervisory Service
said. Sales had been on a downturn for the preceding two years.
Asset-backed securities are bonds or notes backed by assets, which consist of
debt obligations including car loans, home equity loans, credit card receivables
and student loans.
"The increase is mainly due to expanded sales among credit card firms and auto
lease providers that are struggling to meet credit demand," an official at the
watchdog said.
Local card companies more issued ABS in overseas markets as costs of selling
corporate bonds were higher than those of issuing card loan-backed securities
amid the global credit crunch sparked by the collapse of Lehman Brothers Holdings
Inc.
At the end of the year, asset-backed securities represented 14.4 percent of local
firms' direct financing, with bonds and securities accounting for the remainder,
it said.
The watchdog said it may be difficult to see the upward trend of issuances of ABS
by credit providers this year, as the slowing economy will take a toll on
consumer spending, making the use of credit cards and installment financing less
likely.
pbr@yna.co.kr
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