Sakura Bank of Japan will next week bring to market a 29.64 billion ($260 million) deal backed by residential mortgages. The transaction, called RMF 21 Corp., will securitize just over 2,800 loans originated by the bank worth around 30 billion. Sakura will act as joint lead-manager on the transaction with Deutsche Bank.
RMF 21 will be split into four floating-rate tranches with final maturity due in 2032. The 15.4 billion A1 tranche, 7 billion A2 notes and 5 billion A3 tranche have all been provisionally rated triple-A by Standard & Poor's. Additionally, a subordinated 2.24 billion B tranche has been rated triple-B.
Credit support of 8.7% for the senior notes will come through overcollateralization. The weighted average seasoning for the pool is five years with an initial loan-to-value of 57%. The majority of the loans were originated in the cities of Tokyo, Hyogo, Kanagawa and Osaka.
A source close to the deal said that there has been a lot of interest in the bonds both in Asia and continental Europe, for the triple-A paper and the junior piece, a reflection of the quality of the portfolio and the originator.
"There are many aspects that differentiate this deal from other deals in the past," the source said. "One aspect is the interest rate swap which Deutsche will arrange to hedge short-term prime against Yen Libor. The other aspect is that the originator is Sakura Bank, which is one of the largest mortgage originators in Japan, second only to the Government Housing Loan Corp."