Shinki Co Ltd has originated its second securitization of small business loans in Japan. The 20 billion transaction is Shinki's second securitization, following its first deal in 1999. Both transactions were arranged by ING Barings.
Noriko Yamada at ING Barings in Tokyo says: "Shinki wanted to have a different kind of channel for funding. This serves as an alternative to bank borrowing or a straight bond."
A Japan trust structure was used to issue a senior and subordinated beneficial interest. Moody's Investors Service and Standard & Poor's gave the 20 billion senior portion a standalone rating of Aa2/AA, based on the senior sub structure. Shinki's first securitization deal used third party credit enhancement. The senior tranche has an average life of about four years, and a final maturity of about six years.
The subordinated beneficial interest is unrated and will be held by Shinki.
Shinki is the third largest lender to small businesses in Japan, and has an outstanding balance of finance receivables of about 205 billion. The company was established in 1954, and also has a consumer financing business.