The Korea Asset Management Corp. (Kamco), the country's bad-debt clearinghouse, is keeping busy with several asset-backed securitizations in the pipeline.
The agency, charged with buying bad assets from the domestic financial sector, is planning to issue its next domestic asset-backed securitization in March, said a Kamco official. A group of fourteen domestic securities firms will bid at the end of February on the transaction, which will be backed by a pool of non-performing loans from six companies now undergoing restructuring.
The issue size will be from W200 billion to W300 billion ($177 million to $266 million), added the official. The selling banks are Korea Development Bank, Hanvit Bank and Cho Hung Bank. It is the second of nine domestic NPL-backed securitizations totaling about W5 trillion that Kamco plans to issue this year.
Meanwhile, a feasibility study on a global non-performing loan-backed issue has also been completed and submitted to Kamco. The agency wants to launch a $300 million, NPL-backed deal in the Euromarket this summer, said another official.
A decision from Kamco awaits a further review of the study, which was mandated to Deutsche Bank and Warburg Dillon Read last December (ASRI, 12/13/99, p.1), but the official added that he was "confident" it would go forward.
Finally, Kamco is also planning a third securitization, which will be backed by bonds of the Daewoo Group, the debt-burdened Korean conglomerate. The agency has set up a task force team and is working with Morgan Stanley Dean Witter and Samjong Houlihan Lokey to study the feasibility of issuing an overseas issue backed by Daewoo bonds in the next few months, said the first official.
Collateral would be W18.6 trillion of Daewoo-related bonds, which Kamco said in January it will purchase from domestic investment trust companies in an effort to avert a liquidity crisis stemming from a mass redemption of the bonds by the public. More recently, Kamco decided it would pay sellers 36.5% of the face value of the Daewoo bonds.