Hong Kong's Pan Asian Mortgage Company recently launched what is believed to be the world's first securitization of negative equity residential mortgages. South Africa's Standard Bank is arranging the HK$260 million issue ($33.5 million), its first securitization mandate in Asia. The deal has been something of a hot potato, with HypoVereinsbank and Lehman Brothers linked to it in the past two years. Despite the small size, the transaction will be likely deemed a coup for the lead.

"We are delighted to be involved in a transaction of this nature, which allows us to meet the unique needs of this sector in Hong Kong," an official at the bank said. "We are in the final stages of completing the structure, with closing and pricing expected to be concluded before the end of November."

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