With most ex-Japan Asia ABS professionals taking time off over the Chinese New Year period last week, there was a distinct lack of activity in the region. But the early indications suggest the Year of the Rooster will be profitable for many firms, with Korea likely to play a prominent role.
ASR has learnt Korea First Bank, regarded as something of a savior in 2004 as the issuer of three cross-border MBS deals, recently sent out its first request for proposals of 2005. According to a banker familiar with the RFP, 14 banks have been invited to pitch on another MBS offering, with KFB likely to confirm a shortlist in the next week.
With so many bankers on holiday, ASR was unable to confirm who made the initial cut. However, it seems safe to assume that among the invitees will be houses involved on KFB's previous transactions - UBS, Merrill Lynch, BNP Paribas, Calyon, Royal Bank of Scotland. The rest of the list will likely consist of ABN AMRO, Citigroup Global Markets, Credit Suisse First Boston, Deutsche Bank, HSBC, ING, JPMorgan, Nomura Securities and Standard Chartered.
Increased diversity in asset classes is the key reason Korea in 2005 will provide the kind of cross-border issuance it did at the start of the decade. As reported previously in ASR, Citigroup has secured mandates with two air carriers, Korea Air Lines and Asiana, ING was appointed in January to arrange Samsung Card's first credit-card deal for two years, while Kookmin Bank is currently working on a synthetic balance sheet CLO, a potential first for Korea.
For many heads of ex-Japan Asia ABS - mostly residing in Hong Kong or Singapore - Seoul has once more become a home away from home. ASR understands many other potential issuers - principally banks, credit card originators and consumer finance companies - are in the process of finalizing mandates. The post-Chinese New Year period could see unprecedented levels of activity.
"This is the busiest, most productive start to a year I can remember," a veteran of the Asian circuit told ASR last week. "Several proposals and RFPs are out there, not to mention the number of Korean issuers requesting price forecasts."
Meanwhile, further to last week's story concerning the plans of Cagamas, Malaysia's secondary mortgage company, the agency is focusing its immediate attention on its proposed Islamic MBS. Cagamas called for proposals in November, but continued stalling on selecting an arranger due to its own concerns over structure. A well-placed source said Cagamas is now requesting by the end of next week new proposals for a revised structure. As a result, the deadline for bids on a deal backed by SME loans has been extended to early March.
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