THE first mortgage securitisation to be conducted in Hong Kong for five years could herald a flood of other such arrangements on to the market in potentially the most significant shake-up in the banking industry for years.
Investment bank Salomon Brothers is responsible for underwriting the issue, which will be presented within the next month.
The name of the issuer has not been announced, although John Lim, director of fixed interest products at Salomon, refused to rule out a major bank.
Most analysts familiar with the product believe the offering is likely to draw a yield of about 6.5 per cent and be structured on a variety of short-and long-term notes.
Bankers across Hong Kong have expressed their support for the development of what is potentially a massive new capital market offering high-quality bonds with yields at a premium to existing fixed-interest securities.
Clint Marshall, assistant general manager of corporate banking at the Hongkong Bank, said the instrument could also perform a social role by liberating banks from the constraints capital adequacy ratios place on their ability to satisfy mortgage demand.
