S. Korea sees ABS sales surge in Q3

South Korea's sales of asset-backed securities (ABS) expanded 62.5 percent in the third quarter from a year ago on the back of increased sales of mortgage-backed securities, the country's financial watchdog said Monday.

According to the Financial Supervisory Services (FSS), ABS sales amounted to 8.55 trillion won, or 7.17 billion U.S. dollars, during the July-September period, up from 5.26 trillion won, or 4.41 billion U.S. dollars.

Asset-backed securities refer to securities derived from underlying assets such as car loans, home equity loans, credit card receivables and student loans.

The FSS said sales of mortgage-backed securities were pulled up in the third quarter as the state-run Korea Housing Finance Corp. issued more mortgage loans and local banks securitized more non-performing loans.

The Korea Housing Finance issues securities based on its long-term mortgages with a maturity of 10 years or more, while local banks securitized a total of 1.01 trillion-won, or 847.31 million-U.S. dollar, non-performing loans last quarter.

The FSS said it expects non-performing loan ABS sales to continue to climb in the fourth quarter as local banks are forecast to sell such securities further in a bid to upgrade the quality of their asset.

The Korea Housing Finance is also likely to issue more mortgage-backed securities on the back of rising interest rates for home-backed loans, the watchdog added.

Source:Xinhua