-issuance: 407 billion won, weighted average coupon rate: 5.0% On July 28th, KHFC issued KHFC MBS 2004-2 using mortgages as underlying assets. The ceremony for the MBS issuance was held in the Emerald Hall of Lotte Hotel with institutional investors and officials from related agencies in attendance. The total amount issued was 407 billion won using mortgages originated by Kookmin Bank, Kiup Bank, Nonghyup, Woori Bank, and Korealife insurance as underlying assets. The weighted average coupon rate is 5% (spread of 57 bp against five years KTB). Coupon rates for tranches with maturities of three, five, 10, 20 years are 4.28%, 4.63%, 5.08%, and 5.20%, respectively. MBS 2004-2 has six senior tranches with maturities ranging from three to 20 years and one junior tranche. In preparation for possible prepayment, a call option is attached to tranches with maturities of five years or more. -Call is exercisable three months after issuance for the tranches with a maturity of five years. -Call is exercisable three months after issuance for the tranches with maturities of 7.5 years or more KHFC is expected to issue MBS on a monthly basis By allocating more than 40% of issue to tranches with maturities of 10 years and more, it will help develop the long term bond market in Korea. MBS target issuance for 2004 is 4 trillion won. KHFC issued its first MBS, KHFC MBS 2004-1, on June 15th.