9 guarantee companies are starting to buy PF-ABCP on a full scale… Operation until the end of May next year By MoneyS

The Korea Financial Investment Association announced on the 24th that the 1.8 trillion won ‘Asset-Backed Securities Purchase Program (PF-ABCP)’, in which comprehensive financial investment firms will participate, will begin full-scale purchases .

Comprehensive financial investment companies participating in the PF-ABCP purchase program are nine securities companies: Mirae Asset, Meritz, Samsung, Shinhan Investment, Kiwoom, Hana, Korea Investment, NH Investment, and KB Securities.

This program runs until May 30 next year. Investors (25%) participate as middle tier investors, and securities finance (25%) and Korea Development Bank (25%) as senior investors. As the purpose of this purchase mechanism is to support liquidity, the securities company applying for the purchase will also participate as a sub-investor (25% or more) to prevent insolvent transfers. Application to purchase ABCP This is a structure that provides a certain level of collateral when required according to the level of risk.

First of all, the securities to be purchased are A2 PF-ABCP grade, and the purchase limit for each securities company is 200 billion won. The organizers (Meritz, Korea Investment, NH Investment) intend to receive applications for refinancing maturities on a weekly basis and purchase them, and the interest rate of the purchase is intended to be determined by reflecting market interest rates.

As the first purchase schedule, the organizer received a request to purchase ABCP whose refinancing maturity is from the 24th to the 2nd of the following month. It intends to purchase and fully implement a total of 293.8 billion won requested by five securities companies.

Na Jae-cheol, president of the association, said, “This program is expected to adequately solve the liquidity concerns of small and medium-sized securities companies. “It appears that the market and bond crunch can be resolved,” he said.

“It appears that some institutional investors and general corporations are securing excess liquidity compared to the necessary funds due to concerns about market volatility,” he said. We need to refrain from excessive redemption,” he said.

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