For the second time in a matter of months, Sakura Bank, one of Japan's largest city banks, is coming to market with a JPY19.8 billion securitization of residential mortgage loans.

The transaction follows the first transaction RMF-21 that was completed on December 22, 2000 and also comes on the heels of a recent announcement that Sakura Bank will merge with Sumitomo Bank effective April 1, 2001. The new bank will be named Sumitomo Mitsui Banking Corp.

In return for the issue of senior and subordinated beneficial interests, the pool of residential mortgage loans originated by Sakura Bank have been placed into Sakura Trust, established by Sakura Trust & Banking Co., Ltd., a wholly owned subsidiary of Sakura Bank.

While Sakura Bank will retain the subordinated beneficial interest, it will sell the senior beneficial interests to an offshore SPC, Prime Housing Loan Funding Limited (PHLF), in the Cayman Islands. PHLF will issue four classes of floating-rate bonds backed by the senior beneficial interests, and the bonds will be repackaged into corresponding classes of notes by RMF 21-2, another SPC in the Cayman Islands that was established as the final issuer to be sold in the Euro market.

Principal payments of the notes will be redeemed on a passthrough basis. Moody's Investors Service has assigned Aaa ratings to Class A1, A2 and A3. Additionally, Moody's has provided Class B with a Baa2 rating.

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