Turkey's largest securitization deal was launched recently by West LB's London-based securitization team. The $400 million deal for Akbank is backed by a combination of export payment orders, worker remittances and payments to clear foreign bank checks, with the former making up the majority of the pool. It has a five year final maturity.
The mix of assets was put together to make the deal more attractive than a deal backed by one asset class, as the diversity allows for increased protection. "Because the assets aren't correlated it is less likely that they would all be adversely affected at the same time," said West LB's Roberto Speranza.
While on the structuring side the deal is a traditional securitization, West LB has chosen to fund it via the syndicated bank lending market rather than as a bond; in effect, allowing banks to lend to Akbank, but using the securitization structure to mitigate country risk.
That strategy is also a neat way of side-stepping concerns that the relatively small universe of investors who would buy Turkish future flow bonds has already been sated by the spate of such deals in the last two years. Speranza added that West LB also chose the syndicated route because banks were best placed to appreciate the structure and the banking assets that back the deal.
The formal syndication process will not start until early next year, but Akbank has already received the funding from West LB.
The deal is West LB's second syndicated securitization for a Turkish bank after a similar $200 million transaction was launched in June for Halkbank.