The underlying collaterals of Korean ABS backed by auto loans and credit card receivables, as well as RMBS, rated by Standard & Poor's showed solid performance in 2011, despite turbulence in the global economy, particularly in the countries of the European Economic and Monetary Union (EMU or eurozone). We expect this robust asset performance to continue into 2012, reflecting the well-seasoned underlying collaterals in many transactions. Our stable outlook for the asset performance of these transactions is underpinned by our macroeconomic forecast for the Republic of Korea (South Korea or Korea; foreign currency A/Stable/A-1; local currency A+/Stable/A-1), which includes modest growth in economic output, moderate inflationary pressures, and relatively low unemployment rates. Korean household debt, however, has continued to rise over the past decade, and this remains, in our view, the main risk factor for the asset performance of these deals in the mid to long term. Because the Korean economy also relies heavily on exports, a further slowdown in the global economy from our current projections (1.8% economic growth in the US and 0.4pc in the eurozone) would increase the downside risks to our stable outlook for Korean ABS and RMBS asset performance in 2012. In addition, geopolitical risks posed by the Democratic People's Republic of Korea (DPRK; North Korea) may heighten the political instability of the peninsula, which in turn would constrain South Korea's domestic economy and sour the sentiments of its global trade partners.