Samsung Card launches largest non-Japan securitization

Korea''s biggest credit card company launches Asia''s biggest securitization.
Samsung Card, the largest credit company in Korea with assets of around $5 billion, has launched the biggest ever non-Japan Asian cross-border securitization. ING Barings acted as sole lead manager on the $500 million deal, which was placed privately according to the bank.

Following its launch of asset-backed securitization (ABS) deals for Samsung Capital — a $200 million offering in March followed by a $234 million deal earlier this month — ING Barings is approaching the $1 billion mark for 2001. That is a fairly impressive feat given that this has been a quiet year for international ABS transactions out of Asia.

The Samsung Card deal, issued through the Challenger special purpose vehicle, securitizes a portfolio of card loan receivables originated by the issuer. This is the first time such receivables have been used in a Korean cross-border deal.

The notes have been provisionally rated triple-A from both Moody's and Standard & Poor's and have average lives of around 4.5 years and a final maturity of five years. The triple-A rating was achieved because the deal was wrapped by MBIA Insurance Corp, the triple-A rated monoline insurer.

The transaction also uses a revolving structure, which is becoming something of a signature touch from ING Barings and was used on both Samsung Capital issues. The structure adds flexibility because collections on existing receivables can be used by Samsung to originate new card loans. The revenues of these can then be added to the underlying pool that backs the bonds.

An official at ING Barings said that the bank was pleased with the deal on a number of fronts. "We are pleased because not only is it the biggest deal to be done in the region, but it is also the first international credit card transaction out of Korea," the official says.

"Even after the attack on the US, we still managed to get the deal done," he continues. "I think that says a lot, particularly at a time when market sentiment is low for anything coming out of the emerging markets."

Samsung's deal should be followed shortly by another Korean cross-border credit card deal. LG Capital could come to market early next month with its $300 million offering being jointly led by Credit Suisse First Boston and UBS Warburg.