Korea's Standard Chartered First Bank (SCFB) has completed its fifth cross-border residential mortgage-backed offering. Standard Chartered -SCFB's parent -was sole arranger, bookrunner and swap provider on the $650 million issue with Calyon and Royal Bank of Scotland brought in as joint leads.

The deal, issued through the Korea First Mortgage SPV, was backed by a pool of 10,764 mortgages with a weighted loan-to-value of 52.9%. MBIA provided an unconditional wrap for the notes, guaranteeing triple-A ratings from all three international agencies.

Following road shows in Europe and Asia, the bonds were marketed at 15 to 16 basis points over Libor, eventually pricing at the tight end of the range. At that spread, the deal was 2.3 times oversubscribed, attracting bids from over 20 accounts, including several buyers of SCFB's previous transactions. 60% of the notes placed in Europe, with Asia accounting for the remaining 40%.

While final pricing was outside the 13 basis points mark established by SCFB on its March 2005 outing (ASR, 04/04/05), bankers involved said it was tighter on a relative basis to comparable deals in the market.

"When KFB IV was completed in March 2005, credit spreads were at their tightest and have widened since then across all asset classes. That deal came in around six basis points outside where U.K. prime RMBS trades on the secondary market, whereas the new deal was five basis points outside," commented one banker.

Despite this, others in the market questioned why a monoline was brought in to wrap the deal. With rating agencies willing to provide triple-A ratings on a standalone basis to Korean deals - so long as they are structured with enough cushion - rival bankers felt the wrap would make the all-in cost more expensive to the borrower.

The banker involved said the wrap was included for execution certainty', adding that even taking into account the premium charged by MBIA, the "result was not much different to where an unwrapped deal would price."

That said, the banker said discussions with investors revealed most would participate in unwrapped deals by SCFB in the future. The borrower is expected to tap the cross-border market at least once more in 2006.

"SCFB was pleased to see such a strong response from the market for our fifth RMBS issue," remarked Ranvir Dewan, CFO at SCFB. "We believe securitization will continue to be one of SCFB's core funding and risk diversification tools going forward."

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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