International ABS issuance on the rise in Korea

Outside of Japan, Korea is the only Asian country to have a substantial domestic securitization market. International deals are starting to become more common as well.

During the last three years, the asset-backed securitization market ABS in Korea has been a haven for many corporates struggling to borrow the kind of amounts that had previously made available through the loan or straight bond markets. In the wake of the Asian financial crisis, investors became reluctant to take direct exposure to companies. They have become comfortable with securitization issues on the other hand, because deals carry extra credit enhancement and typically expose investors to only one asset type.

Following the Asian crisis, there were many problems with some Korean conglomerates and investors were less keen to buy straightforward fixed income products, explains Ho Yang, managing director and president of Morgan Stanley's...

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