Taishin International Bank has launch Taiwan's first publicly offered credit card receivables securitization with a four tranche NT$10 billion ($320 million) deal from ABN AMRO and a group of seven other joint underwriters.
The deal, launch via Taishin International Bank Credit Card Receivables Special Purpose Trust 2005-1, comprises primarily triple-A notes, totaling NT$8.7 billion, which were priced flat to the 90-day Taiwanese primary commercial paper and have a 13% credit enhancement.
There are two, lower rated tranches and a NT$400 million subordinated tranche.
The NT$500 million class-B bonds are rated A(twn) by Fitch and A2.tw by Moody's and are priced at 40bp over the 90-day Taiwanese CP, with 8% credit support. The class-C rated bonds are rated BBB(twn) by Fitch and Baa2.tw by Moody's, priced at 80bp over with 4% credit support. Taiwan's 90-day CP is currently paying 1.5%
The floating rate notes, with a weighted average life of 3.5 years, feature a three-year revolving period followed by a one-year controlled amortization of four equal quarterly installments, there will be a trail period of 18 months between scheduled and legal maturity at 30 November 2010.
Price discovery for the tranches was set with the bond underwriters before launch, with the target price of CP Primary flat met, the deal was launched at that level. Demand was solid, with the deal oversubscribed at least two times. The issue was sold to 20 institutional investors, made up of banks, insurance companies, bond funds, government pension funds and securities firms.
The notes are baked by 105 thousand generic credit card receivables, such as Visa, MasterCard and American Express, originated by Taishin International Bank, with a principle outstanding amount of NT$11.75 billion. The receivables have a weighted average seasoning of 59 months and a weighted average credit limit of NT$287 thousand.
Local firms Yuanta Core Pacific Securities, Barits International Securities, Taiwan Securities, Masterlink Securities, Jih Sun Securities, KGI securities and Capital Securities made up the remainder of the underwriters.
HSBC will act as trustee.
Taishin International bank is a wholly owned subsidiary of Taishin Financial Holdings with approximately NT$670 billion in total assets.