Dah Sing Financial Holdings, whose residential mortgage volume is way above officially prescribed levels, is holding discussions with investment banks about securitising its loan portfolio. The bank has said its property-related loans are about 49 per cent of its total portfolio. Residential mortgages accounted for 46 per cent, despite a 40 per cent limit laid down by the Hong Kong Monetary Authority. Sources said the bank was under pressure to trim its exposure. The bank is considering whether to securitise the residential mortgage portfolio or sell it to the Hong Kong Mortgage Corp. HSBC Investment Bank is advising Dah Sing. The mortgage corporation was set up under the auspices of the monetary authority with the mandate to buy bank mortgage portfolios and reduce their exposure to the property market. 'Various options are being explored. The bank is waiting for the mortgage corporation to come out with details on what kind of mortgages it will buy,' a source close to Dah Sing said. Hongkong Telecom recently secured the backing of the triple-A rated financial guaranty insurer MBIA Insurance to guarantee HK$800 million of its staff mortgages. Dah Sing is looking at a similar arrangement. Sources said MBIA and the Capital Markets Assurance Corp (Capmac) had bid for the deal, which was believed to be denominated in US dollars. Capmac, another US-based triple-A rated financial guaranty house, has secured the deal. The securities issued with its backing will also be triple-A rated, well above Hong Kong's sovereign rating. Such a high rating increases the securities' marketability as a broader range of investors will be attracted. Dah Sing recruited Gary Wang, the financial controller of Manhattan Card Co, a year ago, partly for his expertise in securitisation. Manhattan Card securitised US$200 million of credit card receivables in October 1994. The source said: 'As the bank's property lending is higher than its peers, it has to work harder on the securitisation option as a means to offload the assets. The question is which approach to take.' He said the bank wanted to be ready when the mortgage corporation announced the criteria for taking up mortgages.