Continued activity is looming from Malaysia, with hire purchase receivables and plantation assets among the cashflows to be securitized. First out of the blocks will be motor vehicle distributor Tan Chong Motor Holdings with a M$164 million ($43.2 million) hire purchase offering.
Arranged by Commerce International Merchant Bankers, the transaction will be the first from a M$600 million asset-backed MTN facility called Premium Commerce Bhd. The program will allow Tan Chong to sell hire purchase assets for the next five-years, while the ABS offerings can have a maximum term of 12-years. Tan Chong will use funds for general working capital requirements.
The first offering is backed by 4,802 contracts with an outstanding principal of M$225.5 million. Tan Chong will also act as servicer for the asset pool, 97% of which includes new vehicles. The entire portfolio consists of Nissan Motor Co. cars. For nearly 50 years, Tan Chong has held the exclusive distribute and assembly rights for Nissan vehicles in Malaysia. Nissan has a 5% overall market share in Malaysia and 12.3% of the share held by foreign car manufacturers.
The offering features three senior tranches - each rated triple-A by Rating Agency Malaysia. The M$80 million two-year notes offer a coupon of 3.75%, while the M$50 million 4-year piece offers 4.35% and the M$30 million seven-year paper pays 5.25%. In addition, the deal features M$2 million of single-A rated seven-year bonds at 9% and a M$2 million unrated subordinate class offering 11%.
Credit enhancement comes chiefly through overcollateralization, excess spread and a liquidity facility.
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