Merrill Lynch wins Samsung Capital mandate

The bank will structure a $300 million securitization of auto loans.

Merrill Lynch has been awarded the first major Asian securitization mandate of the year. Samsung Capital, one of Korea's largest consumer finance companies, has appointed Merrill as sole lead manager for a $300 million deal, for which Credit Suisse First Boston will provide swaps.

Market rumours suggest that Merrill beat off competition from Barclays Capital, CSFB, ING Barings, JPMorgan, Salomon Smith Barney and a select number of domestic Korean houses to secure the mandate.

Although Merrill would not confirm the story, a Samsung Capital official comments that the report is true. "We have chosen Merrill to arrange our next securitization, which we expect to close before mid-April," the official says. "The details have yet to be finalized, but the deal will backed by auto loans and we'll be looking to raise around $300 million for the senior notes."

In arranging this, Samsung Capital's fourth international ABS, Merrill becomes the third bank to be hired by the issuer to work on its securitization offerings.

ING Barings structured Samsung's first two transactions in 2001; a $200 million securitization of auto loans last March and a $234 million deal backed by consumer loans in September.

For the first deal, the notes issued by Samsung were bought by an asset-backed commercial paper conduit operated, rated A1+ and operated by ING, while the second was placed privately.

Salomon Smith Barney led the third transaction - a $302.8 million securitization of unsecured personal loans - to market last December. This latter deal, like the two structured by ING, was rated triple-A by Moody's and Standard & Poor's because of a third party wrap provided by Financial Security Assurance (FSA). It was priced at 57bp over Libor.

The latest mandate confirms that Merrill is beginning to re-establish itself as a player in the Asian securitization market. Having been inactive since February 1999, when it structured a $572 million commercial mortgage-backed deal for Wharf Holdings, the bank sprung back to life late last year.

In November, the bank was appointed to arrange the multi-currency MBS programme for the Hong Kong Mortgage Corp. The first offering from the programme, which will be denominated in Hong Kong dollars, is expected sometime this quarter and will look to raise between HK$1.5 billion ($192.3 million) and HK$2 billion.

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