Malaysia's state-controlled secondary mortgage company Cagamas has been known to spend months deliberating over appointing arrangers for its MBS offerings. For the banks lucky enough to be selected, they could at least say it was worth the wait. If the latest rumors are to be believed, however, Cagamas has outdone itself with the selection process for its next issue. The agency invited bids last month for a M$2 billion MBS offering, which, according to sources, is likely to be an Islamic deal. In an act of decisiveness - driven by a desire to complete the deal in 2005 - Cagamas selected a consortium of Commerce International Merchant Bankers, Aseambankers and HSBC Securities to jointly arrange the deal.

The move was no great surprise: HSBC and CIMB were joint leads on the successful M$2.05 billion ($540 million) IMBS by the issuer in July (see ASR 8/1/05).

However, market whispers suggest the Ministry of Finance vetoed the agency's decision. Sources said last week that MOF wanted to "spread the mandates around," so Cagamas reversed its pick and handed the deal to a competing group of AmMerchant Bank, Standard Chartered and ECM Capital.

Standard Chartered and AmMerchant were involved in previous Cagamas deals, but the presence of ECM Capital in an advisory role has surprised rival bankers. The boutique firm is known for its expertise in the domestic equity market but is thought to have little prior securitization pedigree.

HSBC could at least console itself when it was awarded another MBS mandate by the Hong Kong Mortgage Corp. HSBC acted as arranger when the secondary mortgage agency last tapped the market last October with a HK$2 billion issue.

That deal was notable for the inclusion of three retail tranches, totaling HK$900 million ($116 million), something of a rarity in Asia. A source reported that it was unlikely the upcoming deal would target any retail investors, indicating Hong Kong Mortgage instead wants to complete the transaction in a relatively short timeframe.

No decision has thus far been made on size.

As of press time, the $256 million CMBS HSBC is arranging for CapitaMall Trust was due to price. The transaction - rated triple-A by Fitch Ratings, Moody's Investors Service and Standard and Poor's - is the fourth issued out of the Singaporean REIT's Silver Maple medium-note program.

Following roadshows in Hong Kong, Singapore, London, Dublin and Paris, price talk for the seven-year bonds was between 24 to 25 basis points over Libor. "It is no wonder Singaporean REITs have been so active CMBS issuers," remarked a source. "For seven-year paper, it would be hard to beat those spreads through any other means."

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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