Korean consumer finance provider LG Card last week launched its first 2006 deal. Merrill Lynch is arranger on the $500 million transaction - issued via the Credipia SPV - which is backed by a mixed pool of credit cards and auto loans.
The borrower, currently being taken over by Shinhan Financial, is one of Korea's most active securitizers.
Credit cards account for 73.3% of the pool for LG's latest issue. The transaction, which has a final maturity date of December 2011, features a revolving period for the first 39 months followed by controlled amortization for one year and a 12-month tail period.
Moody's Investors Service and Fitch Ratings assigned triple-A ratings to the $456.1 million senior notes and A2'/'A' to the $43.9 million subordinated piece.
According to rumors, the transaction will be bought in its entirety by Merrill's principal finance group. With arranging fees razor thin, Merrill has in the past few years maximized income by being sole investor as well as arranger on numerous transactions.
While this was initially regarded with suspicion by rival bankers, Merrill's strategy has become commonplace, with other houses including Credit Suisse and UBS expanding their principal finance capability in the past year.
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