1. Korea Housing Finance Corporation
The Introduction of KHFC SLBS - Securitization of Government-Guaranteed Student Loan -
Nov. 2005
Korea Housing Finance Corporation

2. Table of Contents Government-Guaranteed Student Loan 2
Securitization Commitment Program
Student Loan Securitization (SLBS) 6
Summary Information on KHFC 10

3. Government-Guaranteed Student Loan
Establishment of Specialized Fund for Credit Enhancement
Korean Government established「Student Loan Credit Guarantee Fund」
July 18, 2005
To enhance the credit of student loans
Provides 90% Partial Loss Coverage
Ministry of Education & Human Resources Development directs the Fund
KHFC appointed as the Manager of the Fund
Borrowers apply for the guarantee through 15 designated Banks
Provided 470 billion won of guarantee in the 2nd half of 2005
From 2006, the Fund will provide 1.5 trillion won of guarantee annually

4. Government-Guaranteed Student Loan
Development of Long-term Student Loan Product
Maturity
Max. 20 years
Max. 10 years of Grace Period determined by borrower’s academic year(grade), sex or the completion of military services
Max. 10 years of Repayment Period
Interest Rate
Fixed Rate
 Online Application : 6.95% p.a.
 Application at Banks’ Windows : 7.0% p.a.
 Some Borrowers, in lower income bracket, entitled to get 0% or 2% Subsidized Loans (Subsidization Period limited to Grace Period only)
Repayment Terms
Monthly P&I (or Principal only) level payment
Fully Amortizing (No Partial Amortization)
Prepayment Penalty
No Prepayment Penalty

5. Government-Guaranteed Student Loan
Student Loan Securitization
KHFC issues Student Loan-Backed Securities(“SLBS”) backed by Student Loans purchased from 15 designated Banks
KHFC guarantees SLBS P&I payment
Student Loans are funded from the Bond Market
Banks will not hold Student Loans under their balance Sheets
Banks act as the Servicers once they sell Student Loans to KHFC
Borrower repay P&I through the Banks (Originator/Servicer)
Banks get Servicer Fee Income
Banks are free from Credit Risk

6. Securitization Commitment Program
Summary Information
The program was developed to facilitate the origination and securitization of Government-Guaranteed Student Loans
Pre-commitment
KHFC gives pre-commitment to purchase student loans from Banks
Banks give pre-commitment to originate student loans and transfer them to KHFC
Banks will act as the Servicer of the student loans
KHFC funds the purchase of student loans by issuing SLBS
Current Status
15 Banks started to originate student loans from Aug. 12, 2005
The first Issuance of SLBS was closed in Oct. 25, 2005

7. Student Loan Securitization(SLBS)
SLBS Issuance Structure
FSC
Registration of Securitization Plan, Transfer/Trust
Sales of Student Loans
Trust
Issuance of SLBS
Banks
(Seller/Servicer)
Trust
(Trustee: KHFC)
KHFC
Investors
Guarantee Fee
Trustee Fee
SLBS P&I Repayment
Student Loans
Monthly Repayment of P&I
Servicing Fee
Guarantee on SLBS P&I payment
Guarantee
Student Loan Credit Guarantee Fund
Borrowers
Guarantee Fee

8. Student Loan Securitization(SLBS)
Summary of SLBS Issuance Structure
Underlying Assets
Government-Guaranteed Student Loans originated under KHFC’s securitization commitment program
Amount
517 billion KRW
Issuer
Trust (Trustee: KHFC)
Issuance Structure
KHFC provides 100% Guarantee on SLBS P&I payment
Multiple tranches with different Maturities
Sequentially Partially Callable on a quarterly basis
Quarterly P&I Repayment by the exercise of call option
Noncallable Short-Term tranches, supported by 5 yr Fast-pay tranche
SLBS Terms
Fixed-rate SLBS (Quarterly coupon payment)
AAA Credit rating, Listed in KRX, Deposited in KSD, Public Offering
Servicer
15 Banks (Originators)

9. Student Loan Securitization(SLBS)
KHFC SLBS
Tenor
(yrs)
Issuance Amt.
(Bln KRW)
Interest Tate1)
(Fixed rate)
Call option
Senior Tranche 1
270
4.56% - 2
700
4.99% 3
600
5.11% 5
Class A
300
5.53%
Partial Call Option 2)
Class B
1,000
Partial Call Option 3) 7
800
5.64%
Sequential4)
Partial Call Option
After 3yrs 10
5.78%
After 4yrs 15
5.86%
After 5yrs 20
100
5.89%
After 6yrs
Total
5,170
Sub-Tranche5) 21
0.01
Note: 1) Coupon Period of 3 Months (Except Subordinated Tranche)
2) Partial (5%) Call Option Every 3 Months, 6 Months after Issue Date
3) Partial (5%) Call Option Every 3 Months, 1 Year after Issue Date and After Class A Tranche is Fully Repaid
4) Exercisable after Prior Tranche is Fully Repaid, Multiples of 5% of Each Issue Amount, Limit of Callable Dates
5) To be Retained by Student Loan Credit Guarantee Fund

10. Student Loan Securitization(SLBS)
Major Roles of KHFC
Guarantor
Guarantees SLBS P&I payment
Eliminate Credit risks of student loans
Student Loan Credit Guarantee Fund provides 90% partial loss coverage
Covers Liquidity risks in case actual prepayment is slower than expectation
Removes Extension Risks
Trustee
Pays principal and interest to SLBS investors
Publishes performance information of underlying student loans
Prepares and publishes financial statement of the Trust
Manages cash in the Trust
Reconciles student loan P&I repayment amount
Monitors servicer activities and implements measures to reduce losses

11. Summary Information on KHFC
Establishment of State-run Secondary Mortgage Market Enterprise
Korea Housing Finance Corporation Act enacted in Dec. 2003
Integrated mortgage securitization business of KoMoCo and guarantee business of Housing Finance Credit Guarantee Fund
KHFC officially established on Mar. 1, 2004
Korean government & Bank of Korea are sole contributors of the capital
Current capital base : 376 billion won
Authorized capital : 2 trillion won
Losses, in excess of reserves, to be covered by the government (KHFC Act)
KHFC’s own account to be separately managed from that of the Housing Finance Credit Guarantee Fund

12. Summary Information on KHFC
Major Lines of Business
Purchases mortgages and issues MBS
Provides guarantee on MBS (up to 50 times of capital)
Purchases mortgages and Issues MBB (Mortgage-Backed Bond)
Mortgage Portfolio Business (Issuance of MBS or MBB required)
Provides credit lines to lenders to support the origination of mortgages
Issues unsecured Bonds (up to 10 times of capital) and Borrows from financial institutions
Purchases Student Loans and Issues KHFC guaranteed SLBS
Manages Student Loan Credit Guarantee Fund
Manages Housing Finance Credit Guarantee Fund
Guarantee for Individuals
Chonsei Loan, Home Purchase Loan, Installments Loan
Guarantee for Housing Builders

13. Summary Information on KHFC
Student Loan Securitization Business
As of October 31, 2005
The first SLBS Issuance successfully completed (517 billion won)
The first SLBS issuance completed in October 25, 2005
Mortgage Securitization Business
As of October 31, 2005
7.3 trillion won of mortgages originated (99,537 mortgages)
Currently mortgages are originated by 21 Approved Lenders
16 MBS Issuances successfully completed (Total 6.5 trillion won)