CITICORP is preparing to launch a $500 million auto receivable through a Bermuda-incorporated company, bankers say.
One banker said Citicorp Commercial Finance (Hong Kong) would set up a special purpose company, Hong Kong Super Auto-1, for the issue.
Securitisation of receivables involves issuing debt securities that pay investors interest for the life of the security.
The interest and ultimate repayment of the principal are funded by the cash flow from receivables, in this case repayment of hire-purchase agreements for motor vehicles. Citicorp's issue is believed to involve a collar agreement to shield Super Auto-1 from any sudden surges in interest rates. The coupon to investors was tipped at between 45 and 55 basis points (0.45 and 0.55 percentage point) over one-month Hong Kong interbank offered rate.
Meanwhile, HSBC Markets is arranging a $1.5 billion certificate of deposit programme for Dah Sing Bank, allowing Dah Sing to issue either fixed or floating-rate certificates of deposits.
Bankers said a five-year $500 million first tranche was expected this month.
