The Japanese real estate securitization market is branching out into more esoteric asset classes than has been the case in the past, with confirmation that Cosmo Oil, Japan's third largest oil company and one of the largest operators of gasoline filling stations in the country, is preparing a deal to securitize revenues from some of its filling stations.

The deal, which Cosmo is working on with IBJ Securities and Sanwa Bank, will be worth around 33 billion ($312 million) and may come to market soon, a Cosmo official said. It will be backed by rent or leases on 396 filling stations, worth 42 billion, which the company has already sold to an SPV. Cosmo will continue to manage the outlets.

Like many originators in Japan, Cosmo is struggling under a severe debt burden, and has turned to CMBS to improve its balance sheet.

If successful, the transaction will be the first of its kind in Japan, but may not be the last, as Cosmo owns another 600 filling stations, while several other oil companies - also struggling with significant amounts of debt - are expected to watch the deal with interest, securitization pros in Tokyo said.

Meanwhile, one of Japan's leading upmarket retailers, Seibu Department Stores, is to turn to the booming CMBS market as part of efforts to honor the debts of an affiliated real estate developer, pros added.

The transaction arises out of the near collapse of Seiyo Corp., a property developer that began to get into trouble after the collapse of the "bubble economy" in the late 1980s. It will be worth around 90 billion and backed by revenues from Seibu's flagship store in Ikebukuro and three other stores in Tokyo and Sapporo.

Both Seibu and Seiyo are part of the Saison Group, a supermarket and retailing operator, which has just struck an agreement to repay 80 billion to 90 billion to lenders owed money by Seiyo.

The agreement means that the lenders will give their permission for Seiyo to file for special liquidation, a process which avoids the time-consuming and complicated nature of a full bankruptcy, but also means that the creditors share some of the burden of the liquidation.

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