Cosmos offers cash-advance card bonds

The Ministry of Finance yesterday gave its approval to Cosmos Bank Taiwan's (萬泰銀行) plan to start marketing US$340 million worth of bonds backed by its George & Mary cash-advance card loans to overseas and domestic investors.

"This will be the nation's first-ever sale of bonds backed by cash-advance card loans to enter international markets," Huang Tien-mu (黃天牧), the ministry's deputy director-general of monetary affairs bureau, told a press conference yesterday afternoon.

The US$340 million deal, to be managed by Deutsche Bank, includes the issuance of US$255 million in beneficiary certificates to overseas investors, US$45 million in subordinate bonds to enhance the bank's credit and the remaining bonds to modulate the cash-advance card's future cash flows, which tend to fluctuate.

In light of its high spread of cash-card loans, the bank will be able to issue an additional US$35 million worth of bonds to designated local investors, Huang said.

The ministry, in a written statement, yesterday lauded the bank's sale to improve bank assets and reinforce its financial structure while upping its business competitiveness internationally.

Cosmos' executive vice president Shih Kung-liang (施坤良) had said previously that the bank plans to start organizing road shows to meet investors in Hong Kong, Singapore, London and Switzerland, as well as locally.