LG Card, Korea's largest credit card company by market share according to Financial Supervisory Service statistics, is to price its first international securitization of card receivables within the next two weeks, according to market sources.
Credit Suisse First Boston and UBS Warburg are acting as joint lead managers on the deal, with LG Securities acting as co-lead and Kookmin Bank as the back-up servicer.
At a size of $475 million, the deal falls just short of an offering in September for Samsung Card. This latter deal, arranged by ING Barings, comprised $500 million of triple-A paper and is reputed to be the largest US dollar denominated issue to emerge from ex-Japan Asia.
However, as a private placement deal - it is strongly rumoured that the bonds placed with just one investor, Mont-Blanc Financial Services - the Samsung deal was perhaps not as well-publicized as it would have been had it been a large public offering.
The LG Card securitization, to be sold through the Credipia 2001 special purpose vehicle, will feature $475 million of floating rate notes with an expected maturity of five years and legal maturity of six years.
Both Moody's and Standard & Poor's have rated the bonds triple-A because of a wrap provided by Financial Security Assurance, the monoline insurance company.
The underlying portfolio is made up of cash advances, charge card payments and installment loan receivables worth around W1 trillion ($782.6 million). As the receivables are all won-denominated, CSFB will provide the cross-currency swap into US dollars.
Credit support of 15% will be derived from the subordinated seller interest. The deal is also structured with a four and a half year revolving period for the originator to add new accounts to the asset pool, which provides another cushion in the event of defaults in the asset pool.
LG Card returned to the domestic ABS market earlier this week with a W545 billion offering backed by future card receivables. With maturities ranging from one month to two years, and the most senior notes rated triple-A by local agencies, the average coupon on offer was 5.5%.
Meanwhile, Samsung Card is expected to make its second foray into the cross-border market in December or early next year depending on investor appetite. This time round, Salomon Smith Barney is handling the deal, expected to be in the region of $300 million.