The Korea Asset Management Corp. (Kamco), South Korea's bad debt-clearing agency, was set to launch its fourth and last non-performing loan backed securitization of the year on December 27, said a Kamco official.
The W265 billion ($237.5 million) issue by special purpose corporation Kamco Mirae Bond 99-4 is collateralized by bank loans with a face value of W281.8 billion purchased by Kamco from Korea Development Bank, Korea Exchange Bank and Hanvit Bank. The loans were extended to Kia Heavy Industries, Poonghan Corp. and Sammi Corp., all of which are now undergoing court receivership.
The issue comprises six tranches with interest rates ranging from 10.6% to 12.6% and maturities ranging from 2.6 years to 11.5 years.
The issue was arranged by Seoul Securities and will be placed in the domestic market. Credit enhancement is a W45 billion line of credit from Kookmim Bank guaranteeing payments on the senior portion.
In a departure from Kamco's first three NPL issues, the latest one will have a call option allowing the issuing SPC to repurchase the bonds if the underlying NPLs are repaid ahead of schedule. Such a feature was necessary since there is a good chance that some of the NPLs could be repaid before their due dates, said the agency.
This last issue brings Kamco's total ABS issuance to W1.168 trillion this year. The agency is now considering a global NPL-backed issue early next year.