Details emerged last week of two offerings being readied in Taiwan. Anshin Card Services, one of the country's largest credit-card issuers and subsidiary of Bank Sinopac, is working on a NT$1 billion ($31.5 million) transaction, while China Development Industrial Bank will shortly launch a NT$5.1 billion CLO.
Anshin appointed Citigroup Global Markets to arrange its deal, to be issued out of Anshin Credit Card Special Purpose Master Trust. Citigroup also structured Anshin's debut securitization, a NT$3.76 billion issue completed in January (see ASR, 1/31/05). A source close to the situation said regulatory approval has just been secured for the latest issue, with completion expected in early September.
The Anshin transaction will securitize 53,649 accounts worth NT$1.55 billion, with weighted average seasoning of 50.1 months. The deal features five tranches with a legal final of five years and expected maturities ranging from one to three years.
Moody's Investors Service has assigned local ratings of Aaa' to three senior tranches. The NT$322 million one-year class will carry a 1.85% coupon; the NT$322 million of two-year notes pay 1.92% and the NT$276 million three-year tranche offers a 2% return. Additionally, the transaction features NT$20 million of Baa3' rated notes paying 2.50% and a NT$60 million unrated retained tranche.
Subordination for the senior notes is equal to 8%, plus accrued excess spread. That could be substantial if the underlying assets continue their current performance. Over the last 6.5-years, the average annual yield of Anshin's portfolio is 15%.
The company's debut ABS featured two four-year bullet tranches, with the triple-A notes offering 2.50% and the Baa3' paper paying 3%.
China Development, which will also underwrite its debut CLO, has appointed Calyon Securities to arrange the deal. The transaction, to be issued from the CDIB 2005-1 CLO SPT, is backed by a static pool of 21 newly originated corporate loans. The borrowers come from a range of industries, including electronics, transportation and heavy industry.
The main characteristics of the loans will replicate those of the trust certificates issued, including bullet principal repayment on the three-year expected maturity date, eliminating exposure to mismatches in payment terms, currency and interest rates. The deal is also structured with a two-year tail period allowing for recovery should any loans default before the expected maturity.
China Development will issue NT$3.88 billion of senior notes, rated AA' by Fitch Ratings, at a 40 basis point pick up over the 90 day commercial paper index (currently standing at 1.16%). The NT$125.97 million single-A rated certificates offer a 60 point spread; while two classes of mezzanine certificates - rated BBB' and BBB-' - pay 100 and 120 basis points over the CP index, respectively.
The additional unrated NT$822.1 million residual piece will be retained by the issuer. Investors will be further protected by a liquidity reserve and excess spread.
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