Citigroup wins Ñ10bn Asiana securitization

Future flow ABS will mimic KAL deal.

Asiana has mandated Citigroup to advise on a carbon copy of Korean Air Lines' yen-denominated future flow securitization. The airline is hoping to raise ¥10 billion ($92 million) from the bond offer, which is expected to close before the end of the year.

The original deal, handled by Nomura and launched in September, broke new ground for the Korean market despite delays caused by Sars and the Iraq war. Among other things, it was the first yen-denominated ABS from a Korean issuer and the first time that receiveables from the International Air Transport Association had ever been used in a securitization anywhere in the world.

So with all of the hard work out of the way Asiana can now jump in and get a deal done quickly and relatively cheaply. Securitization specialists say that if Citigroup sticks to the template it could get the deal away by December, though that would probably mean selling it solely in Japan while investors elesewhere take a Christmas break.

Whereas KAL was looking to match yen liabilities with its deal, the motivation for Asiana is purely funding, according to market sources.

KAL offered three-year amortizing notes with an average life of 1.6 years, rated at A- by Standard & Poor's and A by Fitch, the same as the sovereign foreign currency rating. It priced at 110 basis points over Libor and the market expects Asiana's offer will price close to that, between 100-110 over Libor.

The Asiana mandate means the team at Citi will be working hard while some rival securitization bankers are already taking early Christmas breaks and hoping that a hefty dose of festive cheer will drown out the memories of a miserable year. Citi will also be trying to gain some momentum on two Taiwanese mortgage-backed deals it has stuck in the pipeline: Taishin International Bank and Chang Hwa Commercial Bank.