A struggling South Korean company, Ssangyong Cement, recently became the first non-investment grade Korean issuer of asset backed securities, with a W100 billion ($89 million) deal backed by cement factories and other real estate.

The transaction is also thought to be the first time that any of Korea's chaebols had issued a securitization, ABS experts said.

The private deal was arranged by Lone Star Fund, a private equity firm better known as a buyer and manager of non-performing loans and other weak financial assets.

A Lone Star official confirmed that the deal had taken place but declined to give further details, beyond saying that the Texas-based company was looking for further opportunities to arrange securitizations in Korea.

Ssangyong was able to issue the deal thanks to a change in Korean law in June that allowed speculative-grade companies to issue securitizations for the first time.

The company has been struggling since the Asian financial crisis hit Korea and it is having to dispose of assets to strengthen its balance sheet. Analysts said that it also plans to sell further assets worth W400 million, with another securitization a possibility.

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