The one notable deal from China in 2006 was issued in the international market. Macquarie Wanda Real Estate Fund - a joint venture between Australia's Macquarie Group and Chinese property developer Dalian Wanda - in October sold the first offshore CMBS involving nine properties located in the People's Republic of China.

The $145 million offering - arranged by Citigroup and Macquarie Bank and called Dynasty Assets - was challenging. Final pricing of 80 basis points over Libor for the 2.75-year single-A rated notes was outside the 60 point target the borrower set with initial guidance. Despite that, closing an offshore deal involving Chinese assets required overcoming numerous legal hurdles. For that, those involved deserve credit.

Elsewhere, South Korea's Standard Chartered First Bank's (SCFB) sixth RMBS - closed in November - was a hit despite the trying circumstances. Firstly, there were doubts the borrower would be able to sell $1.3 billion-equivalent of mortgage-backed paper without a monoline wrap.

Fears grew when North Korea increased its nuclear testing program as the deal was being marketed. Despite this, SCFB - advised by its parent Standard Chartered Bank (SCB) - was able to sell ex-Japan Asia's largest ever cash securitization in its entirety. The senior tranches priced at a respectable 16 basis points over Libor and Euribor, a marginal premium on where SCFB's wrapped deals had priced.

Hong Kong and London-listed SCB, meanwhile, completed two synthetic CLOs in 2007 via its Start Program. Even rival bankers conceded the second transaction - jointly arranged by SCB and Lehman Brothers in November - was impressive.

The deal enabled SCB to transfer credit risk on a $1.5 billion pool of mostly Asian unrated and low-rated corporate loans. SCB saw spreads of 28 basis points over Libor for the super senior piece, 17 points inside its first deal from the program - completed a year earlier. That it was able to place in its entirety the $93.75 million unrated subordinated tranche at Libor plus 700 was considered an even bigger accomplishment.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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