Pre-marketing in Tokyo was underway at press time for a 90 billion ($851 million) lease-backed transaction for Japanese electronics firm NEC Corp., which recently announced that it was selling its headquarters building in Tokyo.

NEC has entrusted its building to Sumitomo Trust & Banking Co., which will issue beneficiary certificates totaling 52 billion that will serve as collateral for the investors. Since there is no mortgage over the property as in a typical commercial mortgage-backed securitization, investors only have an interest in the trust and not in the property itself. Daiwa SB Capital Markets is arranging the transaction, while Nikko Salomon Smith Barney and Morgan Stanley Dean Witter are co-managers.

The issue has a five-year expected maturity and comprises four tranches rated by Moody's Investors Service: a 29 billion tranche rated Aaa, a 7 billion tranche rated Aa, a 8 billion tranche rated A2, and a 8 billion tranche rated Baa2. The remaining 38 billion will be retained by an equity investor, believed to be Sumitomo Marine & Fire.

The transaction will be privately placed with domestic investors. Pricing will be set in the first week of February, said sources in Tokyo.

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