KHFC issues mortgage-backed securities worth 22.7 trillion won in 2013

- The amount rose 11.8% from a year earlier and is the largest since KHFC was established

The Korea Housing Finance Corporation (KHFC, President & CEO Seo, Jong-dae) said on Nov. 29 that the amount of Mortgage-Backed Securities (MBS) it issued in 2013 totaled KRW 22.7 trillion (KRW 13.5 trillion for Bogeumjari Loans, and KRW 9.2 trillion for Conforming Loans). This is an increase of 11.8% from the KRW 20.3 trillion of the previous year, the largest volume since KHFC was established in 2004.

According to KHFC, the weighted average of the coupon rate of the MBS stood at 3.25% (average spread compared to five-year government bond: 0.3%), which was the lowest ever. By maturity, 41% was in short-term bonds (maturities: 1-3 years), 40% was in mid-term bonds (maturities: 5-7 years), and 19% was in long-term bonds (maturities: at least 10 years). As for major investors, banks comprised the largest share with 30%, followed by insurance companies (27%), pensions and funds (20%), securities companies (14%), and investment trust companies (9%).

An official with KHFC stated, “We are seeing a stable pool of investors formed amid the growing amount of MBS issued by KHFC,” adding that “KHFC will work to foster the MBS circulation market by regularly issuing a certain amount of securities, etc.”