CapitaMall Trust (CMT), the real estate investment trust established in 2002 by Singaporean property company CapitaLand, has completed its $215 million CMBS deal via HSBC Securities (see last week's ASR).
Given both subsidiary and parent company's experience in securitization - it is the eighth deal linked to CapitaLand - and the strong appetite from European investors for Singaporean property assets, the transaction unsurprisingly priced at the tight end of the marketing range.
The $195 million five-year senior notes - rated triple-A by all three international agencies - priced at 32 basis points over Libor. HSBC had given an indicative range of between 32 basis points and 37 basis points.
According to officials at HSBC, the deal was more than five times oversubscribed. When asked whether the demand seemed excessive - even for a CapitaLand deal - a rival banker quipped: "A dead cat could sell ABS right now and be two times oversubscribed."
The bonds were placed with twenty investors, 49% of which were asset management companies; 42%, banks; 5%, pension funds; and 4%, insurance companies. In terms of the geographical split, 80% of the notes went to Europe, 17% to Asia and 3% to the Middle East.
"The success of the transaction is testament to the quality of the management team at CMT and the work they put in, with HSBC in explaining the transaction and nature of the CMT REIT to investors across Asia and Europe," said Sarwar Ahmad, HSBC's head of Asian securitization. "The level of demand for the issue and the resultant pricing sets a new benchmark for Singaporean CMBS, and deservedly so."
Further north, Korea First Bank (KFB) on Thursday closed its second international MBS deal of 2004 with a $325 million offering arranged by Merrill Lynch. KFB also tapped the market in April for a $499.6 million transaction via UBS, which was the first public cross-border deal from Korea since Samsung Life's MBS in December 2002.
KFB's second deal is significantly different from its debut. The first transaction featured a wrap from Ambac to get it up to triple-A status and was issued publicly, pricing at 45 basis points over Libor.
Deal number two has been an altogether more private affair. It is unwrapped and is consequently rated AA-'/Aa3' by Fitch Ratings and Moody's Investors Service. Officials at Merrill say the transaction has been executed on a private placement basis - which has led to speculation it will end up in a conduit - and no pricing details have been made available.
Further activity is expected in Taiwan in August. The $150 million five-year auto deal that HypoVereinsbank (HVB) is putting together for Jih Sun Bank has a target launch date of Aug. 12, with completion expected by early September.
According to a source with experience executing deals in Taiwan, pricing should come between 75 basis points and 80 basis points. "That should be straightforward given the current market, asset type, timing and small size," the source said.
When completed, it will be the second cross-border deal issued from Taiwan. HVB was also involved on the first one in December 2003; arranging with UBS a $230 million credit card transaction for Cosmos Bank. That deal, rated Aa3'/'AA-' by Moody's and Standard & Poor's, priced at 93 basis points over Libor at a time of political turmoil in Taiwan.
Meanwhile, Deutsche Bank Securities is working on a CMBS issue for Hung Tai Construction, one of Taiwan's biggest property companies. According to one banker, the NT$2.5 billion ($72.3 million) will be ready to go through the regulatory process by the middle of August.
The Hung Tai deal is the second Taiwanese mandate for Deutsche this year. The bank arranged the country's first MBS transaction in March, an NT$4.28 billion offering from First Commercial Bank.
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