When is a Reat not a Reit

Taipei''s IBM building becomes first to be securitized under Taiwan''s real estate securitization law.

Tong Yang Chia Hsin International is ready to close an NT$2.1 billion $625 million securitization of the IBM Building in Taipei. This will be the first deal to rely on Taiwan's real estate securitization law, enacted in July 2003, and is described locally as a real estate asset trust Reat securitization, which is not to be confused with a real estate investment trust, or Reit.

In effect, the deal is a commercial mortgage-backed securitization, though in fact it is not actually backed by a mortgage - in Taiwan the trust structure provides a stronger framework than would be possible under a typical mortgage-backed structure. However, the ends and the means...

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