“ICICI Bank has been the bane of the Indian securitisation market thanks to its thirst for liquidity due to an underlying phenomenal asset growth,” said one banker. “It could have chosen to stick to usually adopted funding tools like loans and bonds to raise funds but it has taken that extra step to establish the local securitisation market through regular issuances which is very creditable.” The bank holds a major share of the local securitisation market. Out of issuance volumes of Rs370bn (US$

The use of synthetic securitisation as a balance sheet tool by Asian banks outside Japan and Australia remains dormant. That is with the exception of Hong Kong and London-listed emerging markets specialist Standard Chartered Bank. The bank has issued four balance sheet CLOs via its START vehicle since November 2005, the most recent being a self-led partially funded $1.5 billion offering in June. StanChart’s last two CLOs have been mainly referenced to Asian credits. Around 80% of the underlying

Korean issuers are showing strong interest in the securitisation product – a mindset that was missing earlier – and expectations are that once market conditions stabilise, this will translate their interest into sizeable deals. “There are a couple of deals brewing that should rekindle the market,” said one banker. “It will take time before they start hitting the market but with Basle II around the corner and chances that the market will stabilise in coming months, we can expect some sort of flow

Many of the deals closed this year began last year. CBO deals have dominated with five deals worth NT$63bn (US$1.9bn). All CBO deals need to include either high-yielding offshore bonds or domestic perpetual issues to boost yields. While the CBO market grew out of the regulatory push to solve some problem structured notes, but since the work of restructuring such notes originally sold to bond funds has almost been done, not many are left to serve as underlying assets. Consequently, only a few CBO

The move is set to encourage some of the more prolific securitisation users to come out with medium-sized issues. In early September, the Reserve Bank of Australia (RBA) said it was expanding the repo eligible list to include Australian dollar RMBS backed by prime, domestic, full-doc RMBS and rated Triple A; and Australian dollar ABCP backed by prime, domestic, full-doc RMBS (either directly or in securitised form) and rated P-1 or equivalent. The current list of securities acceptable for repurc

Players in the nascent ABS market, not just the parties involved but the entire sector, literally held their breaths as the deal went through bookbuilding on September 11. All were relieved when all three rated tranches were comfortably covered. The parties involved were most pleased with the Rmb250m (US$33.3m) Triple B rated mezzanine tranche C, which was fully covered at 1.08 times as there were no official indications for that tranche and the investors had to make their own judgment. That kin

As a rule, the primary motivation for synthetic balance sheet securitisation is to ease capital constraints. So in Asia, where many banks have been flush for the past five years, this driver has not really existed. There are, of course, exceptions. Singapore’s DBS Bank in 2001 completed the first balance sheet collateralised loan obligation (CLO) by an ex-Japan Asian financial institution, transferring the risk on a S$2.8bn pool of corporate loans. Hong Kong and London-listed Standard Chartered

While securitisation to finance or refinance acquisitions has been popular globally, particularly among private equity firms in the US, access to cheaper alternatives has stopped the trend shifting to Asia. There have been noticeable exceptions. In December 2006, Japanese telecom giant Softbank completed a ¥1.3trn whole business securitisation to refinance bridge loans used in its acquisition of Vodafone’s Japanese subsidiary. Elsewhere, the rapidly growing leveraged buyout market in Australia w

While initial indications are that the problems in the US will not have as large an impact on the Asian market as it had on other markets, things have certainly gotten much quieter in Asia as everyone assesses the impact, works out the extent of the damage and tries to plot what the tighter credit environment will mean. The issues in the US pose little direct threat to the Asian market. The concerns, however, are that they could be the beginning of a wider economic downturn that could impact all