The Korea Asset Management Corp. (Kamco) has mandated arrangers for its next domestic non-performing loan-backed securitization. The agency in charge of cleaning up bad loans from the domestic financial sector has hired LG Securities Co. and Tong Yang Securities Co. for the issue, its second non-performing loan backed deal this year.
Kamco purchased the assets from Korea Development Bank, Hanvit Bank and Cho Hung Bank. The assets are loans originated by the selling banks to domestic listed companies Jinro, Samlip General Foods, and Kukdong Oil & Chemical, domestic steel companies Hanhap and Dongil, and a private shipbuilding concern Dae Dong, all of which are now undergoing corporate restructuring.
The transaction is tentatively sized from W200 billion to W300 billion ($177 million to $266 million) and will be issued on March 31, said sources in Seoul. As with its previous issues, Kamco will be able to exercise put-back options on the assets to the selling banks, a feature designed to put pressure on those banks to make sure that obligors make payments on time.
Separately, Kamco's plans for issuing its first foreign-currency denominated securitization in the Euromarket are still on track. Agency officials said that they have received the results of a feasibility study on the proposed issue, which was mandated to Warburg Dillon Read and Deutsche Bank last December.
"Whether this can be accomplished depends on the size of Kamco's U.S. dollar-denominated loans. If Kamco has enough loans to make this economic, it will go ahead with a U.S. dollar-denominated issue. Right now we still may have to accumulate those assets," said a Kamco official.
A final decision about the Euromarket issue is expected within the next few weeks. If it goes ahead, both WDR and Deutsche Bank will be hired as lead managers for the issue, the official added.