Kookmin Card, one of Korea's largest credit card companies in which Kookmin Bank holds a 74.27% interest, has sent out requests for proposals (RFPs) to a surprisingly large number of investment banks for its first public cross-border securitization, expected later this year.
Sixteen banks - ABN Amro, Bank of America, Bank One, BNP Paribas, Citibank, CSFB, Deutsche Bank, HSBC, ING, JPMorgan, Merrill Lynch, Morgan Stanley, Nomura, Salomon Smith Barney, SG and UBS Warburg - have been approached by Kookmin, a record according to some bankers that have worked in the Asian securitization business for many years.
The competition is already fierce for what is a relatively small number of mandates in the ex-Japan Asia market, almost of which are from Korea, but this takes things to a new level. "I am not sure who has the harder job," remarks one banker who will be pitching for the deal. "The banks, which will be competing not just in terms of structural expertise but costs as well, or Kookmin, as it will have to sift through a lot of paperwork in those 16 proposals."
It will be interesting to see what criteria Kookmin deems most important when it awards the mandate. If recent execution experience is the top priority, then CSFB, ING, JPMorgan, Merrill Lynch, SSB SG and UBS Warburg would be among the favorites, because they have all structured international securitizations from Korea in the past 18 months.
Nonetheless, costs will also be a major factor, and with sixteen banks going for one deal - unless of course some decide not to submit proposals - it seems plausible that Kookmin will be presented with some highly competitive proposals.
The company showed last year that it is prepared to do business with smaller banks when it selected Bank One, much more established in the US than it is in Asia, to arrange a privately placed, unrated $300 million cross-border securitization.
As far as this deal goes, one banker familiar with the RFP told FinanceAsia that Kookmin is looking to raise up to $500 million from the transaction and that a decision on whether to feature a third party monoline wrap will be taken by the arranger at a later date.
Kookmin Card, which has already issued six securitizations in the local markets, joins some of its major domestic competitors in lining up international card securitizations for 2002. Korea Exchange Bank mandated CSFB, HSBC has been chosen by Samsung Card, while Woori Financial recently selected UBS to arrange its first international deal.
Meanwhile, Kookmin has seen its card business grow from W885.14 billion ($730 million) in 1999 to W2,338.6 billion by the end of 2001, an average of 62.5% per year.