With stability returning to Thailand following recent political unrest, Petroleum Authority of Thailand (PTT) and the Ministry of Energy last week awarded the mandate for their joint CMBS to a group comprising Bangkok Bank, Standard Chartered Bank and Thai Military Bank.
The winning consortium beat off the bid from Deutsche Bank, Kasikornbank and Siam Commercial Bank to arrange the THB8 billion ($217.9 million) transaction; set for launch in the second half of 2007.
PTT and the ministry will use deal proceeds to fund the construction of a new business park in Bangkok, including a joint office for the two entities. A special purpose vehicle - SPV Energy Co. - will be established to manage the project, with ABS investors receiving payment based on future rental income.
Staying in Thailand, the state-controlled Secondary Mortgage Corp. (SMC) recently signed a memorandum of understanding with Government Housing Bank and National Housing Authority (NHA) to securitize mortgages originated under the Ua-Athorn housing program.
SMC intends to raise up to THB10 billion from the MBS project. Details on timing have not been finalized.
Ua-Athorn is a scheme designed to offer affordable housing to low-income earners. It was established by NHA and the Social Development and Human Security Ministry during the tenure of former Prime Minister Thaksin Shinawatra, recently ousted by a military coup.
All parties involved will need to offer some structural enhancements or sweet talk investors if they are to put together a successful securitization. The project has been beset by allegations of corruption over the past year.
Indeed, several senior project officials are currently under investigation by the Office of the Attorney General over irregular management and land prices. Additionally, the attractiveness of SMC to investors is questionable given its long-running battles with non-performing loans.
Elsewhere, SK Corp., South Korea's biggest oil refiner, will sell, in November, a KRW400 billion ($424.5 million) ABS backed by account receivables. The deal will part fund the company's KRW860 billion buyback of 13 million of its own shares.
The company last tapped the market in October 2005, with a KWR450 million sale-and-leaseback securitization of its headquarters in Seoul. Shinhan Bank arranged the five-year offering, with Merrill Lynch reportedly the sole investor (ASR, 10/3/05).
Monetary Authority of Singapore (MAS) is working on a framework for insurance-linked securitization (ILS), currently a rare asset class among Asian insurers. By bundling together different types of insurance risk, officials at the regulator believe ILS will help insurers strengthen balance sheets while benefiting investors through product diversity.
MAS will put together a preliminary framework over the next few months before inviting industry feedback in early 2007.
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