ING has become the latest foreign house to land a mandate in Taiwan's embryonic securitization market. The bank will arrange residential mortgage-backed issue for as much as NT$5 billion ($143.6 million) for E.Sun Commercial Bank. Reports suggest that E.Sun would like to launch the deal by the third quarter.
E.Sun joins the list of Taiwanese financial entities lining up ABS transactions, which includes Bank Sinopac, Chang Hwa Commercial Bank, Chailease Finance, Chinatrust Commercial Bank, Cosmo Bank, First Bank, Hua Nan Commercial Bank and Taishin International Bank.
SG and Industrial Bank of Taiwan recently completed the country's first ever ABS deal - a NT$3.65 billion ($104.8 billion) collateralized loan obligation backed by a portfolio of 41 corporate loans. Fubon Securities was hired as lead manager to handle the placement.
The deal was split into two tranches: NT$2.766 billion of senior notes, rated twA by Taiwan Ratings Corp, an affiliate of S&P - and a NT$840 million subordinated piece to be held by IBT. The coupon for the senior bonds, which have expected average lives of 3.7 years and legal maturity of nine years, was set at 2.8%.
The two parties, who essentially operate as a joint venture to secure ABS business in the country, were also mandated on what could possibly be the first securitization by a corporate entity in Taiwan. World Peace Industrial, the semiconductor company, wants to issue NT$2 billion of bonds backed by existing trade receivables.
As for ING, putting together the E.Sun deal will go some way to softening the blow of losing John Mullins, who up until very recently was head of the bank's Asian securitization group. Mullins has departed to try and build a regional ABS franchise at Royal Bank of Scotland and is believed to want seven of his ING charges to join him.