In a move designed to substantially increase its presence in the area of asset securitization, ING Barings said it is purchasing from Swiss-based UBS AG a securitization unit with assets in excess of $7 billion.
Evan Binder, managing director and head of structured finance for the US arm of Dutch-based ING Groep NV, said the purchased assets comprise four conduits, three of which are U.S.-based while the fourth holds non-dollar assets.
In buying the UBS conduits, ING said it will replace Warburg Dillon Read as dealer for the conduits. In addition, 17 UBS employees who administer the conduits in New York, London and Tokyo will be joining ING.
Binder said the combined UBS operation ranks as the 10th-largest in the industry. Mont Blanc is the non-dollar operation, while the three others are the Matterhorn, Eiger and Monterosa conduits. All issue asset-backed commercial paper and maintain top level short-term credit ratings of A-1+/P-1 from Standard & Poor's Ratings Group and P-1 from Moody's Investors Service.
The four conduits hold mainly a mixture of credit card loans, trade receivables and lease receivables, according to a bank official.
ING itself has a relatively small CP conduit with under $1 billion in assets, Binder said.
The purchase of the UBS units will enable ING to expand upon its strategy of providing clients around the world with global services, Binder said. He added that the acquisition will also provide a strong base from which to expand into other types of securitization activities such as term loans.
Market sources said there was no word from UBS as to why they were off-loading the CP conduits. However, they noted Swiss Bank recently acquired UBS and it was possible the asset-backed conduit operations were not commensurate with its business objectives. - David Feldheim