The news that China's second-largest mobile-phone service provider, China United Telecommunications, was set to issue Rmb3.2 billion ($395.5 million) of short-term ABS seemingly came out of nowhere. In fact, when asked their thoughts on the deal, put together by China International Capital Corp, most Asian securitization bankers questioned whether it actually existed (see ASR 8/22/05).
With the focus fixed on the upcoming MBS from China Construction Bank and infrastructure loans ABS by China Development Bank, few expected a third issuer would tap the market this year. But that is exactly what China Unicom has done, even though its deal is more akin to a conduit facility than a term ABS transaction. Unicom will use the proceeds to help reduce the construction costs of expanding its network.