It is shaping up to be a busy summer for the Asian securitization market, with deals expected from nearly all countries in the region. Issuance has already begun in earnest, as Korea, Taiwan and Thailand have all produced deals in the last two weeks.

Korean consumer finance provider Hyundai Capital, one of the country's most prolific cross border issuers, set the ball rolling with a 300 million ($367.6 million) auto loans deal via Calyon Securities. It was the third euro-denominated ABS out of Korea, following two mortgage deals from Korea First Bank. Calyon has been involved in all three.

Hyundai, 38% owned by General Electric Co., securitized a pool worth W590.9 billion (US$590 million) with a weighted average remaining term of 35 months. The deal has a two-year revolving period followed by 28 months of controlled amortization. Issued out of the Hyundai Capital Auto Funding vehicle, the notes are rated Aa3' by Moody's Investor's Service, have three-year average lives and are expected to reach maturity in October 2009.

Although spreads have widened in recent months, euro investors are still hungry for Asian ABS. As such, Hyundai was able to achieve pricing of 29 basis points over one month Euribor - a decent result for unwrapped double-A rated paper with a three-year life. The spread was inside where Hyundai priced its most recent cross-border auto loan ABS. That previous transaction, worth $300 million and offered in July 2004 via Standard Chartered, featured 0.5-year notes at 35 basis points and 1.6-year paper at 51 basis points over.

A well-placed source said the bonds placed with European and Asian institutions, adding orders had to be scaled back due to high demand. Hyundai Capital is likely to tap the market again in 2005, according to sources. If it does, it is likely to be another competitive mandate process. On its latest deal, Calyon beat off competition from HSBC, ING and StanChart in what was a fierce bidding war (see ASR 4/18/05).

Elsewhere, Thailand's Siam Industrial Credit Public Company (SICCO) completed its THB4 billion ($163 million) auto loan ABS, jointly led by Standard Chartered and Siam Commercial Bank. It was the largest domestic deal to date and the first approved by both the Securities & Exchange Commission and the Bank of Thailand.

The deal, assigned local ratings of triple-A by Fitch Ratings, was issued out of SICCO SPV 1 and is backed by a loan pool totaling THB4.9 billion. With a structure featuring an 18 month revolving period followed by controlled amortization for the remaining term of the deal, the notes have weighted average lives of 2.85 years, expected maturity of 4.5 years and legal final of 6.5 years.

After being marketed at between 4.06% and 4.31%, final yield of 4.21% offered a pick-up of 85 basis points over three-year government bonds. With securitizations still a rarity in Thailand - although there are signs of change - finding comparable benchmark paper is not easy. However, SICCO did price outside the last completed transaction, which also featured consumer finance receivables, albeit from credit cards.

In February, AEON Thana Sinsap issued THB1 billion of three-year notes at 4.03% - 70 basis points over comparable government paper - and THB1 billion of five-year paper that carried a 4.92% coupon, an 85 basis point spread. Citigroup Global Markets arranged the transaction.

Despite the price gap, SICCO's deal attracted interest from over 20 accounts and was 1.35 times oversubscribed. "We are pleased to see strong investor interest in this issue," said Warren Lee, head of StanChart's Asian ABS group. "It speaks of the quality of the receivables pool, SICCO's originating and servicing capabilities, and the innovative deal structure."

Meanwhile, Taiwan's Taishin International Bank finally completed its first credit card securitization. The NT$10 billion (US$320 million) deal, arranged by ABN AMRO, has been ready for over three months but the Bureau of Monetary Affairs stalled on giving regulatory approval. Some observers linked the delay to the Taiwanese Government's plans to push its NT$100 billion mega-card program over those done by private institutions (see ASR 4/25/04).

With the go-ahead finally given, Taishin - Taiwan's second biggest card originator - sold NT$8.7 billion of senior certificates, NT$500 million of B-notes, NT$400 million of C-paper and an unrated sub piece. Issued through the Taishin International Bank Credit Card Receivables SPV, the bonds, supported by 13% overcollateralization, have a weighted average life of 3.5-years and legal final of 5.5-years.

The senior notes, locally rated triple-A by Moody's and Fitch, priced level to the three-month commercial paper index, which currently pays 1.5%. The single-A rated B-bonds offer a 40 basis point pickup to commercial paper, the C-notes pay 80 basis points, while Taishin will retain the sub piece.

According to reports, the deal was more than two times oversubscribed with 20 investors participating, including banks, insurance companies, pension funds, bond funds and securities firms.

Taishin, which completed a NT$4.4 billion MBS via Citigroup last April (see ASR 4/12/04), is said to be lining up another NT$10 billion card deal having met with potential arrangers in May.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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