Europe
Italy - Investors who own bonds in the countries jumbo INPS transaction may be able to breathe a sigh of relief, as the much publicized problems with the EURO4.65 billion deal may not be as serious as first thought.
Standard & Poor's has affirmed its AAA ratings for all three tranches after discussions with the Italian state pensions body and deal issuer, Istituto Nazionale della Previdenza Sociale, revealed that the collection figures were actually higher than had been reported.
United Kingdom - Despite recent speculation linking it with a massive EURO10 billion ($8.5 billion) securitization, Railtrack, operator of the U.K. rail infrastructure, insists that it has yet to decide on its method of securing future financing. But, if it should decide to press forward with a transaction, the Office of the Rail Regulator will not stand in the way.
Italy - Italy is very much the hot area for securitization in Europe, according to statistics released recently by Merrill Lynch's ABS research team. The news comes as no real surprise following the introduction of a specific securitization law last April.
So far this year, Italy has seen 16 deals for a total volume of $6.132 billion, compared to just eight deals in the whole of 1999 for a total of $7.733 billion (a total that includes INPS EURO4.65 billion jumbo). With four months of the year remaining, and with more deals in the pipeline, the total issuance is well on course to exceed last year's figure.
Asia
Hong Kong - It may be early days for Hong Kong's fledgling CMBS market, but things are already getting interesting: the market's second deal is being issued by a company that is it in what Moody's Investors Service calls "technical default."
The transaction comes from Paliburg Holdings, a property company that has signed statutory agreements with its bank group to reschedule its debts and could be forced into insolvency if those banks choose.
Singapore - The Monetary Authority of Singapore recently issued what it called the final form of its guidelines governing securitization by banks.
The guidelines (MAS Notice 628) set out the capital treatment of securitized assets, as well as the disclosure, separation and other requirements applicable to banks assuming various roles in a securitization transaction. MAS said that the guidelines seek to ensure that banks involved in the securitization transactions fully understand their roles, responsibilities and risks, and that they hold appropriate capital against the risks they accept.
Japan - Rating agencies Fitch and Japan's Rating and Investment Information (known as R&I) have announced that they will jointly rate certain structured finance transactions.
India - The much-talked about and much-delayed securitization of receivables owed by India's state electricity boards (SEBs) looks like it is back on, said sources in Bombay and New Delhi.
The potential deal, which has been held up by political wrangling and the realization of just how difficult it could be, has finally been given approval by the BJP-led government.
Japan - The increasingly sophisticated Japanese ABS market, might soon see a world first, if ambitious plans to securitize film revenues come to fruition.
Computer game developer Square Co. recently announced that it is working with IBJ Securities to parcel future profits from a yet-to-be-completed movie version of its popular "Final Fantasy" video game.
Japan - Japanese banks are set to turn to retail investors to sell up-coming securitizations, in recognition of the fact that it is not only institutions that are starved of higher yielding securities in Japan's low interest rate environment.
Asahi Bank, for instance, has announced plans to securitize its mortgage portfolio and from the beginning of the next financial year it will be offering the resulting bonds in units of 10 million ($93,000), with the aim of tapping wealthy retail investors. The bank estimates that the bonds will pay a coupon of 30 to 40 basis points over 10-year government bonds for maturities of five to 10 years.
Australia - Commonwealth Bank of Australia recently priced its second global mortgage-backed transaction, achieving better pricing compared to the first deal which was completed earlier this year.
The latest, Series 2000-2G Medallion Trust, consisted of $1.06 billion of triple-A rated notes with an expected average life of 3.1 years. The deal was oversubscribed 1.6 times and priced at 20 basis points over three-month Libor, three basis points cheaper than the inaugural transaction. Merrill Lynch was lead manager with Deutsche Bank and J.P. Morgan as co-leads.
Latin America
Argentina - Argentina's Salta province is working with Lehman Brothers, Banco Santander and Banco Macro on a $250 million deal backed by future flows of the royalties it receives from the exports of natural gas, sources close to the deal said.
The transaction will have a 15-year maturity and will be aimed at U.S. future flow investors. Officials from the province and its advisors are expecting to meet with investors in October with a launch following soon after.
Argentina - Argentinean airline, Aerolineas Argentinas, has been granted yet another chance to come up with a plan to save itself from bankruptcy by its Spanish owner, Sociedad Estatal de Participaciones (SEPI). Shareholders in the troubled company, including SEPI (85%), trade unions (10%) and the Argentinean government (5%), were scheduled to meet last week to discuss how to reduce its $874 million debts, but the meeting has now been put back to October 15.
Unions were keen on the postponement as it buys them some time to come up with an alternative to SEPI's plan to drastically cut costs, which involves a substantial loss of jobs. The unions and the government have seen this as unacceptable, and have suggested that up to $600 million could be raised to save the airline through bridge financing and $300 million of convertible bonds.
