Asia's offshore ABS market looks to heat up

After a six month hiatus, it looks as though the region's ABS market is warming up with two deals preparing to come to market.
After an extended absence it look as though AsiaÆs offshore securitisation market is finally going to step back into the game with two deals already mandated, and a couple of request from proposals (RFP) making the rounds to the various ABS houses.

Hyundai Capital has mandated ING and the Royal Bank of Scotland for a triple-A $500 million five-year auto loan ABS. Currently that deal is being market at 14bp over US-dollar Libor and Hyundai Capital is on a non-deal roadshow that took in Singapore on Monday, Hong Kong on Tuesday, and will hit Frankfurt on Wednesday, before touching down in the US.

The deal is expected to be privately placed and will be wrapped up in mid-September.

Late last year, Hyundai Capital launched a Ç330 million unwrappd cross-border auto loan asset-backed securitisation. That deal, launched via Hyundai Capital Auto Funding IV Limited, has a final maturity of around 5.3 years and an average life of 3 years. Pricing was finalised at 15bp over Euribor.

Hyundai Capital is the leading auto financer in Korea, and leads the market in offering products such as instalment financing for automobiles, and also offes instalment financing for mortgages, durables and personal loans, and new business financing. Indeed, instalment financing makes up the lion's share of Hyundai Capital's total sales, estimated at 80%.

Hyundai Capital finances about 60% of the domestic automobile sales by Hyundai and Kia Motors.

The second deal that is readying itself for the market is a second RMBS for Hsin Hchu Bank. Ironically enough, when Hyundai CapitalÆs deal hit the market last year it came at the exact same time as a similar euro-denominated deal for Hsin Hchu

The new deal is being led by Calyon, and roadshows are set to begin in early September.

The previous deal for Hsin Hchu a Ç255 million RMBS, was the first in the offshore market from a Taiwanese lender and was the first cross-border RMBS issued out of Taiwan. It was launched via special purpose vehicle, Hsin Hchu International Mortgage Loan 1 Limited and was guaranteed by Ambac Assurance Corp.

The deal priced at 17bp over Euribor,

Hsinchu is a Taiwanese commercial bank that enjoys 15% market share in the Taoyuan, Hsinchu and Miaoli regions in Taiwan, the fastest growing regions in the country.

In the pipeline, ThailandÆs Government Housing Bank (GHB) is expected to be sending out an RFP for a 1 billion deal for the securitisation of residential mortgages, possibly with 50-75% to be swapped and placed offshore and the balance placed domestically.

GHB has the largest market share of mortgage finance in the country, with a portfolio made up primarily of lower to middle income loans. The bankÆs net profit fell last year to Bt4.3 billion ($115 million) because of higher funding costs despite growth in its loan business.

Meanwhile KoreaÆs national flagcarrier, Korean Airlines is seeking proposals for a Japanese ticket receivables deal. Korean Airlines saw its net sales rise over the first six months of the year. As of July 30, net sales stood at W3.8 trillion ($3.9 billion), up 8.27% from the W3.5 trillion ($3.6 billion) over the same period in 2005.

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