13 trillion won of MBSs to be issued in the second half of 2015
- Date 2015-07-20
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13 trillion won of MBSs to be issued in the second half of 2015
- 5 trillion won of MBS to be issued first on July 24, 2015 with 1.5 trillion won of MBSs to be issued every month from August under a biweekly issuance schedule -
Korea Housing Finance Corporation is set to issue some 13 trillion won of MBSs secured by Conforming Loans
and Bogeumjari Loans in the second half of this year.
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on the 20th that it will issue 5 trillion won
of MBSs on July 24, 2015 and some 1.5 trillion won of MBSs each month (800 billion won to be issued biweekly)
from this August. Each month, MBSs will be put up for bidding on the first and third Wednesdays and be issued
on the first and third Fridays accordingly.
At the same time, HF and the loan-offering banks have worked out a plan under which the banks will additionally
purchase around 7.3 trillion won of MBSs from HF, the same amount that was sold off to general investors
through competitive bidding for the issuance of Relief Loans MBSs with a longer maturity.
As a result, on July 24th, when HF is going to issue 5 trillion won of MBSs, the banks are to buy all MBSs with maturities
of 1, 2, 3, and 5 years through non-competitive bidding. MBSs with maturities of 7, 10, 15, and 20 years will be sold off
to the market through competitive bidding. However, 7-year maturity MBSs left unsold after the bidding will be purchased
by the banks. In addition, 1, 2, and 3-year maturity MBSs to be issued from August will be sold first to the banks through
non-competitive bidding until their respective purchase targets are reached, whereas MBSs with maturities of 5 years
or more will be placed up for sale to general investors through competitive bidding.
An HF official said, “We expect that with the loan securitization plan for the second half now confirmed, the banks will
be able to meet their MBS purchase goals without significant difficulties. As we are going to resume our supply of MBSs
with maturities of 5 years and 7 years to the market, institutional investors that favor mid- to long-term products will
be given opportunities for stable investment.”