Sinopac lines up mortgage-backed securitization

Taiwanese bank invites foreign houses to advise on debut asset backed deal.

Bank Sinopac is set to become the latest Taiwanese bank to line up a securitization deal, providing yet more evidence that the country is going to be a hotbed of asset-backed activity in the ex-Japan Asia region.

According to market participants, Sinopac will listen to deal pitches from at least two, but possibly three, foreign investment banks this week. CSFB, Deutsche Bank and Merrill Lynch (traditionally Sinopac's house bank) are the three foreign houses which have been strongly linked to the mandate, although none would confirm their participation in the bidding phase.

In common with most other first time issuers seeking to exploit Taiwan's securitization legislation passed this summer, Sinopac is looking to securitize residential mortgages. It is believed that it has not yet decided how much its debut transaction will be for.

Sinopac has become the fourth Taiwanese bank to line up an MBS deal. Deutsche Bank will advise First Commercial Bank on a NT$5 billion ($142.9 million) issue and Chinatrust last week mandated Lehman Brothers to arrange its own NT$5 billion transaction. Hua Nan has still to choose between Citibank/SSB, Deutsche and Standard Chartered for its offering, although sources expect a decision within the next fortnight.

Meanwhile, Cosmos Bank recently selected HypoVereinsbank to handle its debut issue, a consumer loans deal for at least $100 million, the same assets that will be securitized by the Industrial Bank of Taiwan (IBT), in a transaction led by SG.

The two parties signed a cooperation agreement in September 2001 to jointly develop the securitization market in Taiwan before putting pen to paper in January 2002 on a deal that will raise between NT$3 billion and NT$4 billion for IBT.

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