Asia

Indonesia - Asia Asia Pulp & Paper recently issued its second trade receivables securitization in the last year to confirm the reemergence of the country on to the world securitization stage.

The deal, which was arranged by ING Barings and worth $125 million, was rated AA/Aa3 by Standard & Poor's and Moody's Investors Service thanks to a wrap from Bermuda-based multiline insurer, Centre Solutions.

Rumors continue to circulate in Jakarta and elsewhere in Asia that securitization bankers are eyeing onshore deals in Indonesia again, with ABS pros and bad debt buyers seen conspiring in the city's posh hotels.

Several distressed asset buyers have turned their attention to the country, as the opportunities dry up in South Korea and elsewhere and the Asian recovery looks like it may lift Indonesia out of the doldrums. Lehman Brothers, for example, recently confirmed that it has been purchasing distressed assets, with a future securitization a possibility.

South Korea - Echoing warnings that everything in the countries madcap securitization market may not be healthy Standard & Poor's recently cautioned that the growth in ABS may be obscuring lingering trouble with asset quality and could be storing up problems for the future.

Korea's ABS market has grown at an astonishing rate, with W22.9 trillion worth of ABS issued in the first six months of this year, more than three times the amount in all of 1999.

Japan - The county's most prolific securitizer, Orient Corp. (Orico) was back in the international markets at the beginning of the month with the sixth autoloan securitization in its Oscar Funding series. As usual, the deal was lead managed by Dai-Ichi Kangyo International's London ABS team.

The transaction is the first Oscar deal of the year and is split into a dollar-denominated tranche worth $222 million and a piece in euros worth E110 million ($98 million).

India - The country's first mortgage-backed security issue finally arrived at the end of August, after numerous delays and a couple of years in the making. The country's governing body for housing finance, the National Housing Bank, was the issuer and SBI Capital Markets acted as arranger and underwriter.

Brazil - The recent surge in oil prices, which has left oil companies awash with cash, does not mean that Latin America's most consistent securitization asset class - future flows of oil revenues - will dry up, as several Latin oil companies are believed to be talking to their bankers about possible deals.

Indeed, the high price of oil and the improved fundamentals for parts of Latin America may stimulate issuance, analysts said. Brazilian oil company Petrobras, a regular securitzer, for example, is believed to be have mandated BBV, Citibank and Salomon Smith Barney to arrange an issue worth between $300 million and $500 million.

Argentina - World Bank affiliate the International Finance Corp. confirmed last week details of its involvement in the newly established Argentinean secondary mortgage company, Banco de Credito y Securitizacion (Bancs). The IFC set up the company with Argentinean banks Banco Hipotecario and IRSA, and together they are looking at bringing in a strategic partner to help bolster the project.

Brazil - The country first contract-backed cross-border securitization - and the first Brazilian securitization of existing onshore assets to be rated above the sovereign ceiling - was placed at the end of August.

The privately placed $80 million deal comes from MSF Holding, a Latin American medical equipment finance company, and was structured by Deutsche Bank Alex. Brown, which also sold the deal along with Credit Suisse First Boston. It is backed by dollar-denominated leases of medical machinery such as ultrasound devices and scanners and loans to finance similar equipment.

Europe

After the usual August lull, the European market is gearing itself for a busy September.

One familiar face returning to the fray will be U.K. mortgage lender Northern Rock with the third issue from its Granite vehicle. Called Granite 00-2, the GBP1.3 billion ($2.2 billion) transaction is backed by a pool of around 26,000 residential mortgages in England and Wales. As in the previous two issues, J.P. Morgan is lead manager.

Italy - The securitization market was shocked recently with the news that collection figures are far lower than anticipated on the massive E4.65 billion ($4.13 billion) deal launched by the Italian state pensions body, Istituto Nazionale della Previdenza Sociale (INPS).

There now follows the distinct possibility of extension risk on the series 1 triple-A rated bonds beyond their expected maturity, and a similarly, perhaps accentuated, affect on the longer-dated notes in the issue.

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