□ On December 28, KHFC issued "KHFC MBS 2004-7" amounting to KRW 410 billion. KHFC's total MBS issuance in its first year is now KRW 3,016 billion. ◦ Beginning with KHFC MBS 2004-1 issued on June 15, KHFC has made seven regular monthly issuances. □ By providing the debt market with a stable supply of MBS, mainly long-term debt, KHFC has helped rectify the imbalance in supply and demand in long and short-term debt, an issue that has been considered a problem in the domestic market. ◦ 41.8% of MBS that KHFC has issued this year, or KRW 1.26 trillion, was long term mortgages with maturities of ten years or more. KHFC has now established itself as a supplier of long-term securities in the Korean debt market, which has been experiencing a shortage of long-term debt. ◦ The bulk of demand for KHFC MBS originates from banks, insurance companies, pensions and funds, securities firms, and investment trust companies. This shows that KHFC MBS are new investment alternatives for long-term investors, who previously had difficulty in forming portfolios due to the lack of a stable supply of long-term debt. □ Details of KHFC MBS 2004-7 ◦ The issue amount is KRW 410 billion, and the underlying assets are mortgages originating from 15 participating lenders (Kookmin Bank, Industrial Bank of Korea, National Agricultural Cooperative Federation, Daegu Bank, Citibank, Shinhan Bank, Korea Exchange Bank, Woori Bank, Korea First Bank, Cho Hung Bank, Hana Bank, Korea Life, Samsung Life, Samsung Fire & Marine Insurance, LG Insurance). ◦ There are six senior tranches with maturities ranging from three to 20 years, and one junior tranche. In preparation for possible repayment, a call option is attached to tranches with maturities of five years or more. ◦ The coupon rates for tranches with maturities of three, five, 12, and 20 years are 3.44%, 3.72%, 4.12%, 4.37%, respectively. ◦ KHFC held a ceremony for the MBS issuance at the grand ballroom of the Seoul Hilton Hotel at 11:20 on the 28th.