Last year's asset-backed securities (ABS) issuance fell by nearly 10% from the previous year. The decline was largely due to a drop in mortgage-backed securities (MBS) issued by the Korea Housing Finance Corporation using residential mortgage loans as underlying assets.
According to the "2025 ABS registered issuance performance" released by the Financial Supervisory Service on the 30th, last year's ABS issuance totaled 46.7 trillion won, down 9.7% (5 trillion won) from a year earlier.
By asset holder, ABS issuance decreased for the Housing Finance Corporation and financial companies, while issuance by general companies rose sharply.
As policy loans declined, including the end of the special Bogeumjari loan, a policy finance product of the Housing Finance Corporation, the trend of decreasing MBS issuance continued. MBS fell by 5.4 trillion won, from 18.9 trillion won in 2024 to 13.6 trillion won last year.
ABS backed by credit card receivables and installment finance receivables issued by nonbank financial companies also decreased, leading total issuance by financial companies to plunge 17.0% (4.3 trillion won).
General companies increased ABS issuance related to real estate project financing (PF) amid rising demand for public-support private rentals. It jumped 60.0% (4.6 trillion won) from the previous year.
By securitized asset, issuance of ABS backed by loans and trade receivables both declined year over year, while issuance of primary collateralized bond obligations (P-CBO) edged up. P-CBO are securities issued based on newly issued corporate bonds by small and midsize businesses.
Meanwhile, the total outstanding balance of ABS stood at 244.5 trillion won at the end of last year, down 5.1% (13.1 trillion won) from 257.6 trillion won a year earlier.
A Financial Supervisory Service (FSS) official said, "Amid a downward trend in MBS issuance, demand expanded for registered PF securitization using guarantees from the Korea Housing & Urban Guarantee Corporation (HUG), increasing related ABS."