Asset-based securities (ABS) issuance in South Korea posted a double-digit growth in the first quarter due to demand for mortgage-backed securities (MBS), financial watchdog data showed Tuesday.

ABS issuance amounted to 13.4 trillion won (11.7 billion U.S. dollars) in the first quarter, up 16.8 percent from a year earlier, according to the Financial Supervisory Service (FSS).

The double-digit growth was attributable to demand for MBS sales caused by the continued increase in mortgage loans.

The state-run Korea Housing Finance Corp. floated 8.7 trillion won worth of MBS in the first quarter, up 35.0 percent from a year earlier.

The surge in MBS sales came amid growing expectations that the U.S. Federal Reserve is expected to raise interest rates in the second half of this year, which will lead to higher mortgage loan rates with a certain time gap.

ABS issuance by financial companies, including banks and securities firms, stood at 2.8 trillion won, while those sold by telecommunications companies and airlines reaching 1.9 trillion won in the first quarter.