S. Korea's ABS issuance posts double-digit fall on gov't measures to control mortgage loan

Source: Xinhua | 2018-10-30

Asset-based securities (ABS) issuance in South Korea posted a double-digit decline in the third quarter as the government unveiled a set of measures to control mortgage loan, financial watchdog data showed Monday.

The ABS sales totaled 10.9 trillion won (9.5 billion U.S. dollars) in the July-September quarter, down 13.5 percent from the same quarter of last year, according to the Financial Supervisory Service (FSS).

The double-digit fall was attributed to the reduction of mortgage-backed securities (MBS) issuance, which tumbled 21.1 percent over the year to 6 trillion won (5.3 billion U.S. dollars) in the September quarter.

The MBS is issued by the state-run Korea Housing Finance Corp. (KHFC) to securitize home-backed loans owed by households to lenders.

The fall in the MBS issuance came as the government unveiled measures to control household debts, which kept a record-breaking trend amid the near-record-low policy rate.

Households had rushed to purchase new home with borrowed money, but the rising pace slowed recently thanks to the government measures.