Samsung Capital, the Korean consumer finance company, sent out requests for proposals earlier this week for its fourth cross-border securitization. Citibank, Credit Suisse First Boston, Deutsche Bank, ING, Merrill Lynch and Salomon Smith Barney have been invited to bid for the mandate, an official at Samsung confirmed yesterday.
The official told FinanceAsia that the company's next deal - like its second - would be backed by unsecured consumer loans. Samsung is looking to raise $400 million from the issue, scheduled to close by the end of November, the official added.
To date, Samsung Capital has raised $730 million from international securitizations. Its next deal will take it beyond the $1 billion mark and cement its status as one of the most important issuers in the ex-Japan Asia ABS market.
Prior to last year, the sector was characterized by one-off transactions from Korean entities, but securitization professionals were always optimistic that Korea could be a source of repeat issuance, providing greater volume and boosting liquidity. And since the start of 2001, issuers like Samsung Capital, Samsung Card, LG Card and Kookmin Card have done, or are lining up, repeat offerings and using securitization as a vital source of funding and as a way to manage their balance sheets.
Samsung Capital first tapped the international markets in March 2001, with a $200 million issue backed by auto loans. ING arranged that deal û which featured a wrap by the monoline insurer Financial Security Assurance and was sold into an asset-backed commercial paper conduit û and its second offering last September. That was a $234 million consumer loans securitization that placed privately.
The company issued its third deal û and first publicly offered cross-border issue û in May this year with a $296 million auto loans transaction. Merrill Lynch acted as sole lead manager on the deal, which was launched out of the Samsung-Capital Auto 2002-1 special purpose vehicle, registered in the Cayman Islands.
Rated triple-A by Moody's and S&P because of an FSA wrap, the bonds have expected average lives of four years and priced at 36bp over one month Libor, coming in 2bp from the tight end of initial price talk (38bp to 40bp over). Sources close to the deal told FinanceAsia at the time that it was three times oversubscribed, sold to 14 accounts, with 70% placement in the United States and the rest split between Asian and European buyers.
