DBS to securitise its loan portfolio

The Singaporean bank is hoping to pioneer another Asian first, with plans for a synthetic CLO transaction.

Singapore-based investors report that DBS and JPMorgan have been sounding out the market on a S$300 million $165 million offering securitizing a portion of the bank's corporate loan portfolio. Should it materialise, the transaction will not only mark a new step in the development of the Singapore ABS market, but also for Asia as a whole, since synthetic CLO's collateralized loan obligations have only ever previously been used in Japan.

For DBS Bank, the significance of the deal is that it should enable it to manage its capital adequacy ratios more efficiently. As such it does not represent a capital raising, but a capital saving. Synthetic CLO's and CDO's collateralized debt...

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