HSBC has been involved in a groundbreaking deal - the first ABS synthetic transaction originated in Hong Kong that securitizes a portfolio of taxi and public light-bus hire purchase loans. The loans were also originated by HSBC.
There have been just a few other synthetic transactions in Hong Kong in the past. A source at the bank said that this was the first time HSBC had securitized in Asia, and that HSBC had opted for a synthetic structure because it was less complicated to execute than a cash securitizations. Also, as a highly liquid bank, HSBC was not in need of additional funding.