The issuance of asset-backed securities (ABS) in South Korea jumped 34.3 percent in the first half compared with a year earlier as public corporations and non- financial firms rushed to float such securities with sales and loan receivables as collateral, the financial watchdog said Monday.

The country's ABS sales reached 19.8 trillion won (17.41 billion U.S. dollars) during the January-June period, up 34.3 percent from the same period of last year, according to the Financial Supervisory Service (FSS). Financial, non-financial firms and mortgage agencies in South Korea use cash flows from mortgage loans, sales receivables, loan receivables and credit card receivables as underlying asset to issue ABS.

The first-half growth came after surging issuance by public corporations and non-financial companies offset reduction in ABS sales by financial firms.

ABS sales by non-financial firms amounted to 4.9 trillion won in the first half, up a whopping 423.8 percent from a year before. Domestic mobile carriers increased their ABS issuance with handset installment sale receivables as collateral, while ABS sales with real estate project-financing (PF) loans secured as collateral soared 167.2 percent over the cited period.

For the first six months of 2012, ABS issued by public corporations reached 7.1 trillion won, up 33.9 percent from a year before. The Korea Housing Finance Corp. (KHFC) sold 5.9 trillion won in mortgage-backed securities (MBS) during the period, up 37.2 percent from a year earlier, while the Korea Land & Housing Corp. (LH) floated 1.2 trillion won in ABS with rent receivables as collateral, up 20 percent from the previous year.

Meanwhile, ABS issuance by financial companies decreased 8.8 percent on-year to 7.7 trillion won in the first half. The decrease was attributed to sales reduction by credit-specialized financial firms such as credit card companies that reduced their ABS issuance by 10.4 percent over the cited period.

By company, the KHFC ranked first in terms of the ABS issuance volume in the first half, followed by Hana-SK Card that sold 2.8 trillion won in ABS. The Hana-SK Card issued such bonds after securing handset installment sale receivables handed over by SK Telecom as collateral. (1 U.S. dollar equals 1,134.5 won)