South Korean ABS Issuance Jumps 26% in First Half, Driven by Mortgage-Backed Securities

The issuance of asset-based securities (ABSs) in South Korea experienced a significant surge of over 26 percent in the first half of the year. This substantial growth was primarily propelled by a notable increase in mortgage-backed securities (MBSs). The total value of ABSs issued during this period reached 33.4 trillion won (approximately $25.4 billion), marking a considerable rise from the 26.4 trillion won recorded in the same period last year. Mortgage-backed securities accounted for a substantial portion of this increase, with their issuance climbing by 30.4 percent to 15.2 trillion won. This segment was bolstered by the issuance of covered bonds, which saw a remarkable jump of 46.5 percent to 7.4 trillion won. Other types of ABSs, excluding MBSs, also contributed to the overall growth, with issuance rising by 23.2 percent to 18.2 trillion won. The financial sector, particularly banks, played a dominant role in this market, representing 80.6 percent of the total ABS issuance. The robust performance of the ABS market in the first half of 2023 indicates a strong demand for these financial instruments, likely influenced by favorable market conditions and the strategic issuance activities of financial institutions.