Samsung Card, Korea's biggest credit card company with assets in excess of $5 billion, is close to closing its second international securitization, according to a source familiar with the deal. HSBC is acting as sole lead manager on the transaction, which has been given an unofficial closing date of the end of August.
When HSBC was mandated in April, it was rumoured that the deal could be for as much as $750 million, which would have made it the largest ever cross-border deal from the ex-Japan region. In the end, both bank and client settled for a $500 million issue - which equals the record set by Samsung Card last September, and subsequently equaled by LG Card last December, and by Korea Exchange Bank earlier this month.
Samsung Card's latest offering also makes it the first Korean issuer to raise $1 billion from international ABS investors, a mark its sister company Samsung Capital will also reach when it issues its fourth cross-border securitization later on this year.
Aside from the deal size and final maturity of four years, HSBC and Samsung Card are keeping other details close to their chests. However, in terms of structure, it was initially expected that it would be a conduit deal, but the latest speculation suggests only part of the transaction will be sold to a conduit. A special purpose vehicle has also been established to issue bonds, which are expected to be sold privately rather than through a public offering.
It is not yet known whether Samsung Card has secured the involvement of a monoline insurer to wrap the deal. This would enable the bonds to get triple-A ratings, and is something common to Korean deals. Some bankers still feel that wrapped deals are much easier to sell to foreign investors than those whose rating is judged solely on the underlying structure.
Samsung's first cross-border issue, arranged by ING, was issued with a wrap from MBIA Insurance Corp, enabling it to be rated triple-A by Moody's and Standard & Poor's. The bonds, which had average lives of 4.5 years and a final maturity of five years, were placed privately with pricing believed to be just north of 50bp over Libor.