S.Korea's MBS issuance almost triples in Q1

Source: Xinhua | 2020-04-30

South Korea's issuance of mortgage-backed securities (MBS) almost tripled in the first quarter on a yearly basis as the government increased the supply of low-rate loans for ordinary people, financial watchdog data showed Wednesday.

The sale of MBS, issued by the state-run Korea Housing Finance Corp. to securitize home-backed debts owed by households to lenders, expanded to 17.9 trillion won (14.7 billion U.S. dollars) in the first quarter from 4.8 trillion won (3.9 billion U.S. dollars) a year earlier, according to the Financial Supervisory Service.

The MBS issuance began to rise sharply from the fourth quarter of last year as the government provided more low-rate mortgage loans for ordinary people, especially for the low-income bracket.

The country's central bank slashed its target rate by 50 basis points to an all-time low of 0.75 percent last month, lowering debt-servicing burden for households.

The issuance of asset-backed securities (ABS), including the MBS, amounted to 22.7 trillion won (18.6 billion U.S. dollars) in the first quarter, more than doubling compared with a year earlier.

The ABS sale by industrial companies increased in double figures in the quarter, but the issuance by financial firms declined in double digits.