Taishin International Bank (
"The share sale will greatly improve the bank's financial asset transparency and return on assets," Julius Chen (
Taishin's sale is the nation's second securitization plan backed by residential mortgages, after First Commercial Bank (
The government in 2002 passed the Real Estate Securitization Statute (
The property-backed securitization project by Taishin attracted a wide range of financial institutions, including banks, insurers and trust-and-bill finance companies, Chen said.
"Since more investors [than expected] were interested in buying, all shares have been sold," he said.
According to Taishin, the bank's asset-backed securities carry a weighted average yield of 1.73 percent, with a weighted average duration of 2.47 years.
Taishin said that most of the deal's residential mortgages are collateralized with housing units located in the greater Taipei and Taoyuan areas, where property prices are stable.
The securitization project is also the first of its kind to be backed by government-subsidized mortgages, which account for 22 percent of the total, the bank said.
Taishin Financial plans to launch more deals in the second half of the year. Its subsidiary companies own commercial buildings valued at NT$20 billion.
Earlier this month, the bank and Test Rite International Co (
That was the first property-backed securitization project targeting pre-sold housing units for the bank. The project was expected to launch in June, Taishin chairman Thomas Wu (
Gary Tseng (
He said that financial asset securitization plans will contribute not only to the financial sector's credit profile but also to its internal risk management control.
Tseng urged the nation's mid-term and long-term loan providers to take part in the emerging securitization market.
As the deal's organizing bank, Citibank Taiwan (花旗銀行) said yesterday that this will be a profitable deal for Taishin because issuing banks receive, on average, interest income of 3.5 percent on mortgage loans while they pay a yield of only 1.73 percent to investors.
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