Financial Supervisory Service, ABS Registration and Issuance Performance in the First Half of This Year
The registered issuance amount of Asset-Backed Securities (ABS) in the first half of this year reached 29.9 trillion KRW, marking a 24.6% increase compared to the same period last year. This growth is attributed to the increased issuance of Mortgage-Backed Securities (MBS) by the Korea Housing Finance Corporation.
According to the Financial Supervisory Service on the 31st, the issuance of MBS by the Korea Housing Finance Corporation in the first half of this year rose by 5.7 trillion KRW to 17.6 trillion KRW compared to the same period last year, resulting in a 5.9 trillion KRW increase (24.6%↑) in ABS issuance. ABS refers to securities issued backed by assets such as real estate, accounts receivable, and mortgage loans. MBS, a type of ABS, are issued based on mortgage loans and are handled by the Korea Housing Finance Corporation.
The total outstanding amount of ABS issuance stood at 238.4 trillion KRW as of the end of June, an increase of 9.6 trillion KRW (4.2%↑) compared to 228.8 trillion KRW in the same period last year.
Looking at issuance status by asset holders, issuance by the Korea Housing Finance Corporation and financial companies increased compared to the same period last year, while issuance by general corporations decreased.
Financial companies issued ABS worth 8.7 trillion KRW, up 800 billion KRW (9.8%↑) from the same period last year. Among financial companies, banks issued 1.19 trillion KRW of ABS backed by Non-Performing Loans (NPLs), and specialized credit finance companies issued 4 trillion KRW of ABS backed by installment finance receivables. Securities firms issued 2.8 trillion KRW of Primary Collateralized Bond Obligations (P-CBO) backed by corporate bonds.
ABS issuance by general corporations totaled 3.6 trillion KRW, down 600 billion KRW from the same period last year. These ABS were issued based on assets such as terminal installment receivables and real estate project financing (PF).
By underlying assets, loan receivables issuance increased by 6.3 trillion KRW (44.6%↑) to 20.5 trillion KRW, while accounts receivable-backed ABS issuance decreased by 100 billion KRW (1.7%↓) to 6.7 trillion KRW compared to the same period last year. P-CBOs backed by corporate bonds decreased by 300 billion KRW (9%↓) to 2.8 trillion KRW.
A Financial Supervisory Service official analyzed, "The increase in MBS issuance was due to the 2022 Safe Conversion Loan applications and special Bogeumjari Loan applications, which served as the basis for MBS issuance." The official added, "Due to economic uncertainties and rising interest rates, delinquency rates in the financial sector have been continuously increasing, leading to a rise in ABS issuance backed by NPLs."
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