After a steady stream of domestic deals since June, asset-backed issuers in Japan are again starting to look for funding in the Euromarket. "The competitiveness of the Euromarket is returning now. The spreads at which [Japan asset-backeds] have demand in the Euromarket are looking competitive again against the domestic market," commented one banker in Tokyo.

European investors quickly snapped up two auto loan-backed deals from repeat issuers. The larger of these came from Orient Corp. (Orico), one of Japan's biggest consumer credit companies and most active ABS originators. The 36 billion ($338 million) equivalent, 1.5 year average-life issue from Oscar Funding Corp. V comprised a $200 million tranche priced at 29 basis points over one-month US$ Libor, and a E130 million tranche priced at 29 basis points over one-month Euribor. DKB International arranged the transaction, which was rated triple-A by Standard & Poor's and Moody's.

Investors took comfort from the creditworthiness of Japanese obligors, Orico's experience as servicer, and the benchmark status of previous Oscar deals, said a banker at DKBI. "It was extremely well received by a wide range of investors across the U.K. and continental Europe. The order book was closed before launch because the deal was significantly oversubscribed," he commented.

Just one week before, a smaller Euromarket auto loan-backed deal was launched by Quoq Inc., a consumer credit company created from the merger of Tokyo General Finance and Japan General Finance. The issue, from Hexagon II, comprised E160 million of 1.5 year securities priced at 30 basis points over one-month Euribor. The issue was arranged by Deutsche Bank and rated triple-A by S&P and Moody's.

Meanwhile, the domestic market also kept busy. Once again, Orico came to market with its third shopping loan-backed securitization. The 31 billion issue from Orico Shop Version III SPC comprised seven tranches of five-year bullet securities priced from 0.32% to 1.125%. DKB Securities arranged the deal, which was rated triple-A by S&P and Moody's.

Mazda Credit Corp., a financing subsidiary of Ford Credit Japan Inc., also closed its second auto loan-backed deal, arranged by Goldman Sachs.

The 47 billion issue from PanPacific Funding Corp. comprised 11 tranches of five-year bullets priced from 0.29% to 1.03%, rated triple-A by S&P and Moody's.

Last and least in size was a 25 billion, equipment lease-backed deal arranged for Mitsui Lease and Development by Morgan Stanley Dean Witter. The transaction is backed by a pool of leases extended to 53 rated companies. The issue from ML Asset Funding Corp. was priced at 25 basis points over Libor and rated triple-A by Japan R&I.

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