CapitaMall Trust (CMT), the real estate investment trust (REIT) established in 2002 by Singaporean property company CapitaLand, has selected HSBC to arrange a five-year S$370 million (US$215 million) CMBS deal. The transaction will be CapitaLand's seventh securitization in total and CMT's second, following a $164 million offering that closed in February.

According to market chatter last week, the bidding for CMT's latest transaction was highly competitive, with several banks submitting proposals. Among those, two banks will be particularly disappointed to miss out. HypoVereinsbank (HVB) has arranged several deals for CapitaLand, including its most recent $155.6 million offering in April, while BNP Paribas was lead manager on CMT's debut transaction.

Despite the others' efforts, HSBC has come out on top again in what is turning out to be a good year for the bank's Asian ABS business (see ASR 5/31, p. 1). Aside from the well-publicized success of the HK$6 billion government tunnels deal completed in May, the bank is believed to have secured further mandates in Singapore, Hong Kong and Korea.

Given the competitive nature of the bidding, it will be interesting to see where the deal prices. Currently, spreads for triple-A CMBS paper backed by shopping malls are in the 35 to 40 basis points over Libor range.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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