Singaporean property developer CapitaLand last week closed its $332.7 million ABS backed by deferred sales of apartments in two uncompleted residential complexes. HVB acted as arranger and sole lead manager on the deal, issued through the Faramir Investment Corp. special purpose vehicle, which is listed on the Singapore and Luxembourg stock exchanges.

The transaction comprised $292 million of senior notes - rated triple-A by Fitch Ratings and Moody's Investor's Service - offering a spread of 18 basis points over Libor. Additionally, the $22.2 million double-A rated piece priced at 32 basis points, while the single-A rated $18.5 million tranche finished at a spread of 50 basis points.

All notes are expected to mature in June 2008 and have a legal final of December 2009. According to sources, the bulk of the bonds were placed with European investors.

The pricing highlights how Singaporean ABS has become much sought after by overseas investors since CapitaLand completed its last deferred payment ABS in April 2004. On that $155.6 million offering, also arranged by HVB, spreads ranged from 35 basis points over Libor for the triple-A notes to 90 basis points for the single-A notes.

On the week of pricing for the latest issue, Moody's announced that it has placed the two subordinated tranches on the 2004 deal on review for a possible upgrade. The agency said the review was prompted by good construction progress on the residential projects backing the deal, increased apartment sales and the upward price trend in Singapore's residential property market.

Meanwhile, two real estate investment trusts managed by CapitaLand - CapitaMall Trust and CapitaCommercial Trust - could also offer securitization opportunities in 2006. Both REITs are in the process of ambitious acquisition programs, domestically and abroad. Given they have previously refinanced acquisitions by CMBS issuance; there is every chance they will do so again.

Similarly, one of CapitaLand's rivals, Keppel Land may also be ripe for CMBS activity in the near future, sources said. The developer is planning to establish a new property trust - K-REIT - on the Singapore Stock Exchange in April.

K-REIT will acquire Keppel Land's holdings in four commercial properties, with an estimated valuation of S$630 million ($389 million). Sources say K-REIT will refinance around S$200 million of that through a CMBS offering. Timing has yet to be determined; although it is probable the deal will be sold offshore.

Elsewhere, Malaysia's Tiong Nam Logistics, which specializes in road and container haulage as well as in providing warehouse space, revealed details of a M$269.4 million ($72.9 million) sale and lease-backed Islamic securitization. Deutsche Bank and Hong Leong Islamic Bank have been appointed joint lead arrangers.

The deal, to be issued from the ABS Logistics SPV, will be split into five tranches of Sukuk Al-Ijarah (leasing notes). Although the transaction is subject to approval from shareholders and the Securities Commission, Tiong Nam expects to complete the offering in the second quarter.

Under the terms of the deal, Tiong Nam subsidiaries will sell logistic assets worth approximately M$191.56 million to the SPV, and then lease them back for the 10 year-term of the transaction. At maturity, Tiong Nam will have the option of buying back the assets.

The company says proceeds from the sale will be used to repay existing debt and for working capital needs. The deal will also help Tiong Nam reduce its gearing ratio.

Further south in the region, Australia's AMP Bank last week completed the latest issue from its Progress RMBS facility (ASR, 03/20/06). The A$900 million ($644.8 million) transaction - led jointly by Deutsche Bank and Societe Generale - was upsized from A$750 million due to strong demand from domestic and foreign investors.

The deal featured A$873 million of senior paper, rated triple-A by Moody's and Standard & Poor's, which priced at 14 basis points over the bank bills swap rate (BBSW) for a 2.6-year average life. That was one point tighter than where it was initially marketed, and just one point wider than the tightest ever Aussie dollar tranche, established by Commonwealth Bank of Australia on its recent A$5.5 billion issue (ASR, 3/13/06).

In addition, A$27 million of double-A rated notes priced at the tight end of the indicative range, offering a 20 basis point spread for a 4.5-year average life. A total of 28 investors bought in, with over half the notes placed outside Australia: 44% in Europe and 10% from Asian buyers.

Also in Australia, Citigroup Global Markets completed a A$300 million RMBS through its Compass Master Trust facility. Unsurprisingly, the bank self-arranged the deal - backed by a pool of revolving mortgages - bringing in Macquarie Bank as co-manager.

The transaction comprised A$288 million of senior paper, rated triple-A by Moody's and S&P, which priced at 14 basis points over BBSW. The single-A rated A$12 million subordinated piece offered a spread of 29 basis points.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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