S. Korea's ABS issuance jumps 62.5 pct in Q3

SEOUL, Nov. 2 (Yonhap) -- Sales of asset-backed securities (ABS) in South Korea
jumped 62.5 percent in the third quarter from a year earlier on increased sales
of mortgage-backed securities, the financial watchdog said Monday.
ABS issuance stood at 8.55 trillion won (US$7.23 billion) in the July-September
period, compared with 5.26 trillion won the previous year, according to the
Financial Supervisory Service (FSS).
Asset-backed securities are derived from underlying assets such as car loans,
home equity loans, credit card receivables and student loans.
"In the third quarter, sales of mortgage-backed securities climbed as the
state-run Korea Housing Finance Corp. extended more mortgage loans and local
banks securitized more non-performing loans," the FSS said in a statement.
Korea Housing Finance provides long-term mortgages with a maturity of 10 years or
more and issues securities based on such lending.
Local banks securitized 1.01 trillion won worth of non-performing loans last
quarter, up 188.2 percent from a year earlier.
The watchdog said it expects non-performing loan ABS sales to continue to
increase in the fourth quarter as local banks are forecast to sell such
securities further to boost their asset quality. Rising interest rates for
home-backed loans also are expected to encourage Korea Housing Finance to issue
more mortgage-backed securities, it added.
sooyeon@yna.co.kr
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