The Bank of Korea has eased guidelines surrounding collateralized debt obligation deals sold locally and this is expected to speed up transactions. Credit officials in Seoul said in the last few weeks the B.O.K. has changed from a case-by-case approval process for CDOs to having firms just register a completed transaction with the regulator.
"The B.O.K. has been looking at these types of deals for a long time--they've got a firm grip on this now," said a marketing head at a bulge bracket house in Seoul. He continued that previously the approval process took about a month, so the move should give firms much more regulatory comfort to issue CDOs, which have long been eyed suspiciously in the country, given the memory of Asian financial crisis which impacted creditworthiness across the region. The primary interest in credit investment products has stemmed from insurance companies, which have been investing in more and more complex transactions, such as asset-backed security CDOs.
Officials at the B.O.K. in Seoul declined all comment.
