The issuance of asset-backed securities in South Korea surged 63.8 percent in the first quarter from a year earlier, led mostly by state-run firms, the country’s financial regulator said Tuesday.

ABS sales by local financial firms and mortgage agencies totaled 8.94 trillion won ($7.86 billion) in the January-March period, compared with 5.46 trillion won the previous year, according to the Financial Supervisory Service.

The spike came as public firm Korea Land and Housing Corp. and Korea Housing Finance Corp. increased issuances of mortgage-backed securities and other ABSs, the FSS said. The total issued by the two corporations reached 3.3 trillion won from 1.2 trillion won a year earlier.

In addition, ABS issuance by non-financial companies, such as local mobile carrier LG Uplus Corp., hit 2.1 trillion won, up from 300 billion won.

Meanwhile, ABS issuances by financial firms, including banks and credit card companies, fell to 2.5 trillion won, from 3.3 trillion in the first three months of 2011.

Financial companies and mortgage lenders use cash flows from mortgages, loan obligations and credit card debts as underlying assets to issue ABS.

In 2011, South Korea’s ABS issuance climbed 15.7 percent on-year to 32.4 trillion won worth of securities sold. 

(Yonhap News)