BANK of America (Asia) is close to awarding a mandate for another multi-mortgage-backed securities issue, with Salomon Brothers a front-runner for the deal. Bank director and executive vice-president Samuel Tsien said the bank was discussing the deal with Salomon. 'Salomon Brothers is a natural candidate [for the mandate],' he said. Salomon arranged a previous $350 million securitisation for Bank of America, which pioneered the instrument in Hong Kong. Mortgage-backed securities are debt instruments whose interest payments derive from mortgages. Banks pool the mortgages and sell the bonds to investors so they can free-up capital. Bank of America wants to tailor the issue for regional interests and not just traditional multi-mortgage-backed securities buyers in the United States and Europe. 'We're still looking at the structure to see what needs to be done to see how we can appeal to more Asian-based investors,' Mr Tsien said. Robert Hong, vice-president of debt capital markets at Salomon, expected the issue to be similar to the earlier securitisation by Bank of America. 'It will probably be multi-tranche, but I don't know how many and I don't know how much it will be for,' he said. The earlier issue had two tranches and featured a special-purpose vehicle to take and serve the mortgages and collect payment from investors. It was planned to standardise the sale of the mortgages to help deepen the market. Bank of America said in August this deal would probably be in three tranches. Mr Hong said the issue would probably be launched towards the end of the year. Meanwhile, despite a substantial fall in fixed-rate issuance because of rising interest rates in the US, Oakreed Financial Services has arranged two fixed-rate certificates of deposit (CD) issues. Bank of Tokyo (Hong Kong) issued $100 million worth of CDs maturing on October 17, 1997, and carrying a quarterly coupon of 7.93 per cent. Issue price was at par. Sanwa Bank issued $100 million worth of CDs maturing on October 18, 1999. The quarterly coupon was 8.5 per cent and issue price was also at par.