Taiwan's structured finance market is set to grow this year, driven by bond and real estate trust issues.
A current slowdown in the sale of personal loan portfolios will be offset by an uptake in Taiwan' s new real estate investment trust (reit) market, which saw its first three offerings last year.
At the same time, a slew of collateralised bond obligations (CBOs) in the first half of this year will drive the momentum begun last year, but is expected to trail off towards the end of the year.
Ratings agency Moody's expects a 10 to 15 per cent growth in reit offerings this year based on deals already in the pipeline.
Three separate reits issued by insurance firms Fubon, Cathay and Shin Kong last year totalled US$940 million, according to Moody's, with those reits backed by just a handful of individual properties.
Shin Kong Financial's Reit No 1 issued in July last year was valued about US$360 million but backed by only four properties. By comparison, reits in Australia and the United States are often backed by hundreds of properties, while reits in Singapore may start with few properties but grow in size.
'The trend [in Taiwan] is for fewer properties, but with the passage of time, we'll see more and more properties [within a portfolio], for example properties to be developed,' said Marie Lam, vice-president and senior analyst at Moody's.