The issuance of asset-backed securities (ABS) in South Korea plunged 39.7 percent in the first quarter due to a sharp decline in sales of government-led mortgage funds, data showed Tuesday.

The value of ABS issues stood at 13.7 trillion won ($12.1 billion) in the quarter, down 9 trillion won from a year ago, according to the data from the Financial Supervisory Service (FSS).

ABS are structured with mortgages, auto loans, credit-card receivables and student loans as underlying assets.

The plunge came as the Korea Housing Finance Corp., the state-run mortgage agency, decreased the issuance of its mortgage-backed securities (MBS).

The amount of MBS issued by the agency came to 9.1 trillion won last year, down 49.4 percent from a year ago.

MBS issuance fell sharply in the first quarter as financial institutions completed selling loans with low fixed interest rates for low-income people, the FSS said. (Yonhap)