Korea Housing Finance Corp.

Critical public policy role of providing long-term housing finance. Integral link with the government with strong track record of support. Interest-rate risk arising during loan origination and securitization. Concentration in mortgage-related business. The stable outlook on Korea Housing Finance Corp. (KHFC; AA/Stable/A-1+) reflects the sovereign credit rating of Korea (AA/Stable/A-1+). The ratings on KHFC reflect our view that the agency will sustain both its critical public policy role of providing long-term fixed-rate mortgage loans and its integral link with the government at least for the coming few years. We equalize the ratings on KHFC with those on the sovereign because we expect the agency to remain a government-related entity with almost certain likelihood of receiving government support. We could upgrade

...Strengths: Weaknesses: + Critical public policy role of providing long-term housing finance. + Integral link with the government with strong track record of support. + Interest-rate risk arising during loan origination and securitization. + Concentration in mortgage-related business. Outlook The stable outlook on Korea Housing Finance Corp. (KHFC; ##/Stable/A-1+) reflects the sovereign credit rating of Korea (##/Stable/A-1+). The ratings on KHFC reflect our view that the agency will sustain both its critical public policy role of providing long-term fixed-rate mortgage loans and its integral link with the government at least for the coming few years. We equalize the ratings on KHFC with those on the sovereign because we expect the agency to remain a government-related entity with almost certain likelihood of receiving government support. We could upgrade KHFC if we were to raise the sovereign ratings on Korea. We would lower the ratings on KHFC if we lowered the sovereign ratings on Korea....

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