Shinkong Life Insurance Co (
Shares may be sold to the public as early as the second quarter, the nation's third-biggest life insurer said.
"We plan to launch NT$5.5 billion worth of beneficiary shares backed by Jasper Villa as early as the second quarter," said Reghpa Wu (
Wu was upbeat about the company's issuance of property-based securities, given that the villa has generated a fixed rental income of NT$300 million annually for the past eight years.
"The villa's occupancy rate stands at 98 percent," he said.
Despite the news, shares of Shin Kong Financial Holding Co (
The legislature passed the Financial Asset Securitization Law (金融資產證券化法) in 2002, which allows the repackaging of assets such as residential mortgages, car loans and credit-card receivables.
The proceeds from the transaction are expected to help the prospective issuer boost capital and diversify investments.
If NT$5.5 billion is raised, Wu said that the insurer's reserve capital will jump from NT$687.5 billion to NT$693 billion, which will be used to either re-invest in the local real-estate market or to fund the company's other re-investments.
But he stressed that the Jasper-based securities will be a "differentiated" investment target to attract investors since most yet-to-be-launched securities are backed by office buildings.
The property sector's future securitization plans, including Shinkong's plan, will be one of the major stimuli to boost the economy and the real-estate sector in particular, Wu said.
In December last year, Far Glory Group (
Company chairman Chao Teng-hsing (趙藤雄) said at that time that it planned to launch NT$3 billion in seven-year beneficiary shares backed by the group's Far Glory International Center (遠雄國際中心) in the middle of this year.
"With an estimated market value of NT$6 billion and a 100 percent occupancy rate, the Far Glory International Center has an annual fixed rental income of NT$240 million, or a 4 percent rate of return," Chao told the Taipei Times at the time.
Allen Hsu (
Hsu also expressed a bullish view of the new securitization market, in which risk is low, since most capital is sitting idle with a low return as a result of low interest rates.
"Investors may become less interested if the interest rates rise, which is unlikely this year," Hsu added.
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