Asia
Hong Kong - Moody's Investors Service has upgraded its ratings on several tranches of a Hong Kong CMBS deal, due to the transaction's robust performance in difficult economic circumstances.
The transaction in question - Harbour City Funding 1 - was issued by property group Wharf Holdings in February 1999 and backed by a portfolio of retail and office properties. It was lead-managed by Merrill Lynch and totaled US$575.2 million - at the time, the biggest ever non-Japan Asian ABS deal.
Five series of notes were upgraded: series B1 US$70 million floating rate notes, from Aa2 to Aa1; series B2 HK$319.9 million floating rate notes, from Aa2 to Aa1; series B3 HK$67.5 million fixed rate notes, from Aa2 to Aa1; series C2 HK$260 million floating rate notes, from A2 to A1; and series C3 HK$295.3 million fixed rate notes, from A2 to A1.
Korea - The Korean Asset Management Corp., the country's bad debt agency, last week issued its first international securitization and one of non-Japan Asia's first cross border securitizations of non-performing loans. The $367 million deal, which was joint lead managed by UBS Warburg and Deutsche Bank, seems to have been a runaway success, with all the paper sold prior to the official launch.
The deal is backed by a portfolio of restructured loans - worth $419 million- originated by six Korean banks and sold to Kamco after the onset of the Asian financial crisis caused the loans to turn bad. Over 90% of 135 loans to 45 obligors are denominated in U.S. dollars, with the rest in yen.
Malaysia - Several investment banks are at one stage or another of securitizations in Malaysia with Nomura International the first to make a public announcement that it is working on a deal.
Nomura is working on an "operating company" or "whole business" securitization for a Sarawak-based silicon wafer manufacturer called 1stSilicon. The deal will parcel the revenues of the business, principally sales of wafers, the building blocks of semiconductors, plus all of the company's assets. It is expected to be completed in the first quarter of next year and, if it is a success, it will refinance a $180 million syndicated loan that Nomura has already organized for the company.
Europe
Amsterdam - Dutch mortgage lender Bouwfonds Hypotheken, a subsidiary of ABN Amro, last week launched an mortgage-backed deal that was underwritten and managed by its parent company. Called Castle 1, the E200 million ($188 million) deal is backed by of a pool of around 5,700 loans with an average loan-to-value ratio of 67%.
The mortgages were sold by Bouwfonds through brokers and insurance companies. Stater was brought in as servicer. The deal employs a simple pass through structure. Credit enhancement of 5.5% for the senior A notes comes from subordination on the two junior tranches, excess spread and a reserve fund that will amount to 0.6% of the notes at closing. The B notes are protected by subordination on the C notes, which in turn are protected by the fund and excess spread.
Denmark - Unibank recently became the first Scandanavian bank to arrange a multiseller asset-backed commercial paper conduit. Advances from notes issued by the conduit, called Viking Asset Securitization Ltd., will be used to purchase receivables or securities from highly rated organizations. The first to go into the pot was the purchase of $92 billion of triple-A rated wrapped CBO transaction. Credit enhancement for the program is in the form of a letter of credit and a liquidity facility provided by Unibank.
Germany - Commerzbank last week launched the largest ever mortgage-backed transaction to come out of Germany. Called Commerzbank AG, Residence 2000-1, the EURO2.5 billion ($2.35 billion) synthetic deal is backed by a pool of residential mortgages originated and serviced by Commerzbank. The bank also arranged and managed the transaction.The underlying pool comprises around 41,500 loans with a value of just over EURO2.5 billion, with 68% being first ranking mortgages
Latin America
Brazil - BNP Paribas and co-arranger Banco BBA finally closed last week a $135.5 million privately placed securitization of export receivables for Brazilian iron ore pellet exporter Samarco Mineracao S.A. The transaction was actually sold and priced in January, but it has taken until now to get all the paperwork in place, including approvals from the Brazilian authorities.
Three series of notes were issued through the Iron Ore Master Trust. The first series consisted of $33.5 million and was exchanged with the holders of the secured export notes issued by Samarco in 1995. The second series of $32 million was placed with one Japanese investor and four European commercial banks. Both sets of notes carry a coupon of Libor plus 300 basis points and have a five-year final maturity. The third series consisted of $70 million in notes, which were sold to three major U.S. mutual funds. The notes carry a fixed coupon of 10.04% and priced at 350 basis points over Treasuries.
