Following a strong showing in 2004 for its ex-Japan Asian securitization business, Citigroup Global Markets has begun the New Year in similar fashion. The team, led by John Dahl, has secured cross-border mandates from two Korean air carriers, Korean Air and Asiana Airlines.

Citigroup fended off strong bids from Nomura Securities and Standard Chartered for the KAL deal, sources reported, with StanChart also short-listed for Asiana.

Both airlines have previously tapped the international market. KAL, Korea's largest carrier and part of the Hanjin Group, completed its 27 billion ($252.6 million) ABS debut backed by yen-denominated Japanese ticket sales in September 2003. The three-year deal, arranged by Nomura, featured a guaranty from the Korea Development Bank, pricing at 110 basis points over Libor.

KAL's next offering is scheduled for completion by the end of 1Q05. According to well-placed sources, the deal will again securitize yen-denominated air cargo receivables. Korea Development Bank will guaranty the notes, which will bring the deal up to an A-minus rating by international agencies.

Meanwhile, Asiana made its inaugural cross-border foray in December 2000 - the first Korean future flow deal with a $65 million transaction via JPMorgan Securities. The company then followed Korea Air's lead in December 2003, with its own 10 billion securitization of Japanese ticket receivables, arranged by Citigroup.

So far, few details have emerged on its upcoming deal, but rival bankers are suggesting that it might be a refinancing of Asiana's second transaction. Sources at Citigroup would not confirm the use of proceeds.

Copyright 2005 Thomson Media Inc. All Rights Reserved.

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