ABN Amro recently brought to market one of the most significant deals to come out of Hong Kong in the last year. Called HK Synthetic MBS, the HK$1.27 billion ($161.7 million) transaction is not only the first time a synthetic structure has been used in non-Japan Asia, but is also the first time that Standard & Poor's has rated a deal backed by existing assets beyond the sovereign ceiling.

A portfolio of almost 1,200 loans with a residual value equal to that of the notes issued backs the transaction - which employs a credit default swap structure between the originator and the SPV. Despite the pool consisting entirely of first-tier prime mortgages, strict eligibility guidelines were imposed as to which loans were included.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.