HF Corporation Seeks to Include MBS as Stablecoin Collateral Asset

**Key Issue Briefing**

**MBS Expansion:** Korea Housing Finance Corporation (HF Corporation) is pursuing a plan to include mortgage-backed securities (MBS) in won-denominated stablecoin collateral assets, moving to expand the bond demand base. MBS carries credit ratings comparable to government bonds, and market activation is expected to enable lower policy mortgage rates. Market sentiment appears to be shifting as Mirae Asset TIGER Short-term Bond Active ETF increased its MBS allocation from 1% to 9%.

**Bond Market Volatility:** The 3-year treasury bond yield fluctuated around 3%, with credit spreads widening to 47.4 basis points and corporate bond yields rising to the 3.5% range. However, additional demand for credit bonds is expected with the launch of the first Integrated Managed Account (IMA) product within the year and expansion of commercial paper businesses. Further spread widening is expected to be limited as specialized credit finance bonds showed strength, narrowing rate differentials.

**Margin Trading Surge:** Retail investors' margin loan balances reached a record high of 27.355 trillion won, reflecting expectations for a year-end Santa rally. Meanwhile, investor deposits decreased from 88.27 trillion won to 79.39 trillion won, indicating that leveraged buying sentiment among existing investors is strengthening rather than new capital inflows. However, loss risks from volatility are rising as KOSPI fluctuated more than 1% in 10 of the past 20 trading days.

**News for Financial Product Investors**

**1. HF Corporation Seeks to Include MBS in Stablecoin Collateral Assets**

Korea Housing Finance Corporation is pursuing a plan to include mortgage-backed securities (MBS) in won-denominated stablecoin collateral assets. MBS possesses credit ratings and market outstanding volumes comparable to government bonds, and its use as stablecoin collateral is expected to expand the bond demand base. HF Corporation expects to offer policy mortgages at lower rates through MBS market activation.

**2. Credit Spreads Volatile Amid Treasury Yield Swings; Year-end Widening Expected to Be Limited**

Credit spreads between 3-year treasury bonds and corporate bonds (AA-) reached 47.4 basis points amid heightened volatility as treasury yields fluctuated around 3%. Spreads that had narrowed to the 30bp range for the first time in four years due to strong corporate bond demand last month are widening again due to year-end off-season and uncertainty over the Bank of Korea's potential fourth consecutive rate hold. Treasury yields temporarily declined with new 3-year issuance and benchmark changes, while corporate bond yields rose from the 3.3% to 3.5% range due to reduced demand and lower trading volumes.

**3. Hanwha Life Executive: "Korea-UAE Century-long Partnership Will Continue Through Finance"**

Kim Dong-won, Chief Global Officer of Hanwha Life Insurance, stated at the Abu Dhabi Finance Week (ADFW) 2025 Global Market Summit in Dubai that Korea and the UAE's century-long partnership will continue through finance. Kim emphasized that both nations share DNA of turning crises into opportunities and pursuing long-term trust-based relationships, and that finance will serve as a key catalyst for converting cooperation intentions into opportunities. Four Hanwha financial affiliates are participating as premier partners at ADFW 2025, establishing a practical cooperation framework.

**Reference News for Financial Product Investors**

**4. Heungkuk Signals Legal Action; Eagers Asset Management Acquisition in Turmoil**

Heungkuk Life Insurance, which lost the bid for Eagers Asset Management, has signaled legal action citing bid price leakage and progressive deal issues. While Heungkuk submitted the highest bid in the main auction, the sale advisors reportedly encouraged Hillhouse Investment to raise its offer, ultimately selecting Hillhouse as the preferred bidder at 1.1 trillion won. Concerns are also being raised about whether Chinese private equity firm Hillhouse can pass financial regulators' major shareholder qualification review, and whether Chinese capital dominating Korean and Japanese real estate managers could give it significant influence across the East Asian market.

**5. Margin Trading Surpasses 27 Trillion Won to Record High on Santa Rally Bets**

Retail investors' margin loan balances reached a record 27.355 trillion won amid growing expectations for a year-end Santa rally. The increase in leveraged investment is attributed to KOSPI recovering to 4,100 on expectations of Federal Reserve rate cuts following the FOMC meeting. Meanwhile, investor deposits fell from 88.27 trillion won on the 5th of last month to 79.39 trillion won, indicating strengthening leveraged buying sentiment among existing investors rather than new capital inflows.

**6. Nvidia and SoftBank Bet on Robotics with $1 Billion Skild AI Investment**

U.S. chipmaker Nvidia and Japan's SoftBank Group are in negotiations to invest more than $1 billion (approximately 1.5 trillion won) in U.S. AI robotics company Skild AI. If completed, the investment would value Skild AI at $14 billion (approximately 20.6 trillion won), up from $4.7 billion in its Series B round earlier this year. Founded in 2023 by former Meta AI researchers, Skild AI focuses on developing general-purpose software that serves as the brain for robots. As humanoid robots emerge as a key next-generation AI application area, Nvidia and SoftBank Group are accelerating investments in the field.