Asia
Philippines-The Philippine government has recently been making positive noises about establishing a framework from which securitization could develop, but again, skepticism reigns among industry analysts in the region. They insist that although the mind may be willing, the country is still a long way off its aims. But an economy in desperate need of funds, and a government looking at any means possible to secure this, should increase the possibility of an active asset-backed market developing, sources say.
Hong Kong-ABN Amro recently brought to market one of the most significant deals to come out of Hong Kong in the last year. Called HK Synthetic MBS, the HK$1.27 billion ($161.7 million) transaction is not only the first time a synthetic structure has been used in non Japan Asia, but is also the first time that Standard & Poor's has rated a deal backed by existing assets beyond the sovereign ceiling.
Japan-Sakura Bank of Japan will next week bring to market a 29.64 billion ($260 million) deal backed by residential mortgages. The transaction, called RMF 21 Corp., will securitize just over 2,800 loans originated by the bank worth around 30 billion. Sakura will act as joint lead-manager on the transaction with Deutsche Bank. RMF 21 will be split into four floating-rate tranches with final maturity due in 2032. The 15.4 billion A1 tranche, 7 billion A2 notes and 5 billion A3 tranche have all been provisionally rated triple-A by Standard & Poor's. Additionally, a subordinated 2.24 billion B tranche has been rated triple-B.
Japan-Daiwa Bank recently came to market with its first residential mortgage-backed transaction. Called Maison Capital Corp., the 28.97 billion ($260 million) transaction securitizes a portfolio of mortgages originated by the bank with a residual value of 30.2 billion. Daiwa brought in Nomura Securities to arrange the deal. The reference pool includes two different types of home loans: normal home loans and refinance loans, where obligors choose to borrow from cheaper private lending institutions than are available from the state housing agencies. The majority of loans were originated in the last two years.
Korea-The Korea Deposit Insurance Corp. (KDIC), the government agency responsible for restructuring the Korean financial sector, last week mandated four banks - two domestic, two foreign - to structure a transaction to be backed by lease receivables originated by the organization. The partnerships of Credit Suisse First Boston and Daewoo Securities plus Societe Generale and Hyundai Securities were selected to structure and sell the deal, although at this stage it has not been announced who will be doing what. CSFB recently set up a team in Singapore to cover ABS in non-Japan Asia.
Europe
Italy-Cultivating a trend, the Italian state institution for compulsory insurance against accidents and illness, INAIL Societa di cartolarizzazione p.A., has closed a EURO1.35 billion deal (USD $1.2 billion), similar to a Lit8 trillion (USD $4.35 billion) deal that was completed in 1999 by the Italian state pensions agency, Instituto Nazionale della Prev-idenza Sociale (INPS). INPS launched the initial deal of this kind last November and announced that it planned to launch a series of deals worth at least EURO8 billion over the next three years. At the same time, the treasury announced it was looking to arrange the INAIL transaction. More recently, the Italian government has also given the mandate to investment banks to arrange the second transaction from INPS.
Germany-Unusual for a non-bank, Siemens AG has set up a commercial paper conduit as a sponsor. The assets securitized will comprise present and/or future receivables of all kinds, including consumer loan receivables, securities and tangible assets. Siemens Capital Corp. (the administrator) is a corporation organized under the laws of Delaware. The performance and financial obligations of the administrator are guaranteed by Siemens AG.
Italy-Banca Commericale Italiana (BCI) launched its second securitization on Dec. 5. Once again the transaction was a synthetic. The deal allows BCI to free-up regulatory capital and internal limits associated with certain exposures. The previous synthetic Scala 1 was done in November 1999 and it securitized BCI's corporate loan portfolio. This time the collateral pool was different. In Scala Synthetic 2 Limited (SCALA 2), BCI bought credit protection through credit default swaps on a EURO750 million portfolio of credit default swaps of investment grade obligors in North America, Western Europe and Australia. The obligors are all rated by Standard & Poor's and/or Moody's.
Australia-Investor demand for the innovative A$133 million commercial mortgage-backed securitization by retailer David Jones was sufficiently strong to cause lead manager Deutsche Bank to bring forward the pricing by a week. The deal was part of an elaborate A$366 million sale-and-leaseback package, A$166 million which reflected the value of refurbishment work: the deal was said to be the first rated by Standard & Poor's involving a portfolio under refurbishment.
Latin America
Costa Rica-As government agencies both in the U.S. and abroad seek to develop and refine housing finance mechanisms in emerging markets, 2001 may turn out to be the year for securitization in Latin America to swing into full bloom, sources say. Last week, market participants reportedly were "hoping" to close an ongoing Costa Rican MBS deal by February 2001, with two smaller, less-developed deals from the same country rumored to be launching at the same time. Additionally, ideas of developing the secondary mortgage market have also been brewing in Nicaragua, Honduras and the Dominican Republic for quite some time.
