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Standard Bank Asia Limited (“SBA”), the Asian arm of Standard Bank Group of South Africa, as Underwriter, Arranger and Book-runner, has closed a landmark securitisation transaction for Pan Asian Mortgage Company Limited (“Pan Asian”) backed by a HK$1.25 Billion portfolio of HK residential mortgages. The deal was very well received in the market and was comfortably over-subscribed.

In the first deal of its kind, Pan Asian, in partnership with two local Hong Kong commercial banks, refinanced mortgages with loan-to-values greater than 100%. This portfolio was originated between 2002 and 2004 and is well diversified with approximately 750 mortgages.

The transaction offered two classes of Notes, a Class A tranche of HK$221 Million and a Class B tranche of HK$36 Million. The Class A tranche was assigned ratings of Aa2 and AA- by Moody’s and S&P respectively while the Class B tranche was assigned a rating of BBB from S&P.

The unique features inherent in this deal created a robust structure which enabled the assignment of an Aa2 rating from Moody’s to Class A Notes, which is one notch above the Hong Kong sovereign rating level; along with a coupon linked to the HK Prime rate, which allowed investors to enjoy a higher absolute yield; and a ‘double-turbo’ repayment mechanism, which enables a faster repayment of the Notes.

Mr. Malcolm Wilde, Chief Executive, Standard Bank Asia Limited commented, “We are delighted to have led in this groundbreaking transaction for our client, Pan Asian, which also allowed us to meet the growing investor demand of innovative structured products in Hong Kong."

SBA and Pan Asian priced the deal better than the lower end of the indicative yield range to show their appreciation to the investors who participated in this inaugural securitisation. “As this is the first deal from Pan Asian’s mortgage-backed securities program and is in many ways unique and innovative, the pricing is extremely attractive to investors given the strong credit ratings, well protected cash flow structure and limited number of highly rated HKD bond issues in the market”, said Mr. Leland Sun, Chief Executive Officer, Pan Asian, adding that securitization is a key part of Pan Asian’s future growth strategy.

About Standard Bank Asia Limited
SBA is a wholly owned subsidiary of Standard Bank Group Limited (SBG). Based in South Africa, SBG is the largest banking group in Africa as measured by market capitalisation (US$ 13.6 Billion equivalent) and asset base (US$ 85.7 Billion equivalent). SBG employs approximately 35,000 people and has offices in 39 countries. Internationally, the group offers a wide range of specialist investment banking services, focused on emerging markets and natural resources. SBA, a Hong Kong-based fully licensed bank regulated by the Hong Kong Monetary Authority, serves as the hub for the group’s Asian activities, while Standard New York, Inc., located in New York acts as the hub for the Americas.

About Pan Asian Mortgage Company Limited
Pan Asian is an innovative financial services company breaking new ground in asset securitization in Asia. It is involved in the financing, structuring, servicing and securitization of residential mortgages, credit card and consumer loan receivables. Founded in 2000, the company comprises a team of financial experts with over 65 years of experience in real estate finance, asset and mortgage securitization in Asia, risk management, structured finance, international debt capital markets and local market funding.