UBS Warburg tipped for Woori securitization

Rival banks say UBS has won latest Korean cross-border credit card ABS.

Woori Financial, the Korean holding company established last year by Hanaro Merchant Bank, Hanvit, Kwangju, Kyungnam and Peacebank, is believed to have awarded the mandate for its first international securitization to UBS Warburg.

Although UBS officials declined to comment on the reports, FinanceAsia has been told by officials at three rival banks, who also bid for the deal, that UBS has definitely secured the mandate, beating off bids from Barclays Capital, CSFB, Deutsche Bank, HSBC, ING Barings, JPMorgan and SG.

According to a banker familiar with the request for proposals sent out by Woori, the transaction will be for between $400 million and $500 million, backed by credit card receivables - surprise, surprise - will be launched in the second half of the year and feature a third party guarantee from one of the triple-A rated monoline insurers.

Woori joins Korea Exchange Bank, which mandated CSFB, and Samsung Card, which selected HSBC, on the list of Korean institutions that will securitize credit cards in 2002. It is highly likely that LG Card and Kookmin - two of last year's issuers - will be added to that list before the end of 2002.

Presuming UBS is the preferred bidder; its selection is not that much of a surprise considering its role as joint lead manager, with CSFB, on last year's credit card issue by LG Card and its closeness to the Woori group. The five-year $500 million deal for LG Card was rated triple-A by both Moody's and S&P on account of a monoline wrap from Financial Security Assurance and was the first publicly offered international credit card securitization from Korea. Pricing came at 50bp over Libor.

Although this will be Woori's first cross-border offering, the company has already tapped the domestic ABS market with a W340 billion ($258.4 million) offering in January. The deal, also backed by credit cards, was lead managed by Bookok Securities and Hanvit Bank.

Split into two tranches, a W140 billion one-year tranche offers a nominal fixed rate coupon of 5.56%, while a W200 billion three-year piece has a 6.82% coupon.

Meanwhile, Woori will shortly seek to raise up to W810 billion through an initial public offering (IPO) starting on May 29. LG Investment and Securities and Samsung Securities will handle the sale of 90 million shares prior to the expected listing of Woori Financial on the Korea Stock Exchange in either June or July.

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