Asian ABS professionals, particularly those at Lehman Brothers and Standard Chartered, received an early Christmas present when Chinese authorities lifted the one remaining tax hurdle causing delays to the pilot securitization schemes by China Construction Bank and China Development Bank.

Although both banks had received initial approval in March for up to RMB10 billion (US$1.23 billion) of issuance (ASR, 4/11/05), neither deal made economic sense while China's laws meant both the originator and special purpose trust would be subject to income tax on the underlying assets.

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