Hong Kong and London-listed Standard Chartered Bank has completed its synthetic balance sheet CLO. After successful roadshows in Asia, Europe and the Middle East, the reference portfolio was upsized to $2 billion from the initial $1.5 billion, with the rated part of the offering increased to $162 million from $121.5 million.
StanChart and Deutsche Bank Securities jointly led the deal, issued out of the Start CLO vehicle and listed on the Irish Stock Exchange. StanChart says the transaction will enable it to boost liquidity and expand its origination program. Presumably the deal will also hold some regulatory capital benefit, although it is not clear to what extent.
The five public tranches all have six year scheduled maturities and a legal final of nine years. The $100 million senior piece - rated triple-A by Fitch Ratings, Moody's Investor's Service and Standard & Poor's, offers a 45 basis point spread over Libor. The $20 million of AAA/Aa2/AA' rated B-notes priced at 60 basis points over Libor, while $12 million of AA-/A2/A' rated C-paper pays 90 basis points over the benchmark.
Additionally, the deal featured $18 million of BBB/Baa2/BBB-' rated D-class notes paying 220 basis points over Libor and $12 million of BB/Ba1/BB' rated E class paper offering a 650 basis point spread to Libor. The issuer will retain a $42 million unrated equity piece.
StanChart was involved in Samsung Card's Korean auto loan securitization completed last week. The Korean consumer finance company, one of the country's most active ABS issuers, issued $300 million of triple-A rated bonds offering a pick-up of 17 basis points over Libor. Placement details were not available as of press time.
Samsung last tapped the market in March with a $300 million credit card ABS via ING (see ASR 4/4/05). The notes, rated Aa3' by Moody's and AA-' by S&P, priced at 30 basis points over Libor.
Elsewhere, the state-controlled Hong Kong Mortgage Corp. has completed the latest deal from its Bauhinia mortgage-backed program. HSBC Securities arranged the HK$1 billion ($129 million) issue, which takes overall issuance by Hong Kong Mortgage to HK$11.2 billion since its debut offering in 1999.
The underlying pool comprises loans bought from the Hong Kong Housing Authority, another state-entity, which was in the process of completing Hong Kong's first REIT listing last week. HSBC also has an advisory role on the HK$19.8 billion listing, along with Goldman Sachs and UBS.
Hong Kong Mortgage's transaction is comprised of $400 million of three-year bullets, paying 4.73%, and HK$600 million of floating-rate notes offering an 18-basis point pick-up over one-month Hibor. The floater has a fast pay structure to take in excess repayment and prepayment of the underlying loans for the first three years.
Both tranches are guaranteed timely repayment by Hong Kong Mortgage and also qualify for a 20% risk capital weighting under Hong Kong banking rules. Hong Kong Mortgage said the deal was widely distributed to institutional investors, including insurance companies, pension funds, investment funds and banks.
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