Despite difficult market conditions in S. Korea, Korea Thrunet Co. Ltd. has stepped up to the plate with a KRW 120 billion privately placed securitization - the country's first transaction with an offshore special purpose vehicle.

Thrunet, S. Korea's largest cable-modem broadband Internet-access service provider and a major provider of enterprise network services, securitized receivables from customers in its Enterprise Network Services business. Bank of America structured the deal and Hyundai Securities Co. Ltd placed the transaction.

The deal provided Thrunet with a long-term source of funding, and the company intends to use the proceeds for refinancing purposes. In a statement released by Bank of America last week, Heesuk Noh, vice president of the BofA Asian asset securitization team said, "Careful consideration was taken in developing a structure that will enable Thrunet to achieve its financial objectives while simultaneously complying with the relevant Korean legal and regulatory frameworks. We believe this is the first Korean securitization that utilized a Cayman Islands SPV instead of a domestic SPV to issue KRW-denominated bonds."

According to market sources, in recent months there has been a fair amount of interest out of Korea. "[Going forward] it will be a good market overall," said one market analyst. "If you look at the volumes last year compared to other areas, they really did quite well in terms of getting stuff done - consumer loans, the KDIC lease deal etc... Our problem with Korea is that spreads are just too tight to put people on deals, but that could change - hope it does."

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