Cagamas, Malaysia's state-owned mortgage company, has mandated a team of three banks to handle what could be, in Asian terms, a jumbo residential mortgage-backed securitization.Aseambankers and Commerce International Merchant Bankers (CIMB) are the appointed local banks, with Standard Chartered fending off rival bids from the likes of HSBC and Citigroup Global Markets to add international expertise.
Cagamas is looking to raise MYR2 billion (US$526 million) from the exercise, which will be backed by housing loans extended to government employees, according to sources in Malaysia. Bankers say that CIMB will be charge of structuring the deal, with Standard Chartered offering additional technical support.
Standard Chartered has also linked with another deal for the Thai consumer finance company, Aeon, having arranged an issue backed by hire-purchase receivables earlier this year.
Meanwhile, despite the fact that Credit Suisse First Boston will soon face up to life without Greg Park, its departing head of Asian securitization, it has emerged that the bank - along with Lehman Brothers - has been appointed to work on a local currency residential mortgage deal for China Construction Bank (See ASR 6/14/04, p. 1)
CCB has also asked the banks to initially work separately on ideas for deal structures, sources said. Rival ABS bankers in Asia responded to the news with some weariness, pointing to past failures by CCB to get an MBS deal off the ground.
In May 2000, CCB was given approval from regulators to work on a pilot MBS program with Australia's Macquarie Bank. Nothing ever came of that, with the banks unable to negotiate through legal and regulatory red tape that prevented securitization taking off in the People's Republic at that time.
However, the situation has definitely improved in the past 18 months, with regulators and government keen to deepen the Chinese capital markets. In May, CSFB's strategic transactions group was involved on the Rmb820 million (US$99 million) non-performing loan deal completed by the Industrial Bank of China.
As for Greg Park's next move, speculation is mounting that he may be heading to Morgan Stanley, which is believed to be looking to hire someone to head its non-Japan Asia business.
Over in Japan, it is believed that Millea Real Estate Risk Management, a subsidiary of Millea Holdings, focused specifically on securitization, will set up a new real estate investment fund within the next couple of months.
The new fund, which will be worth Y10 billion (US$91.3 million), will buy up buildings in Tokyo. The fund will then sell beneficial interests to investors, primarily financial institutions and pension funds, backed by rental income and any future sales of the buildings.
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