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Pan Asian Mortgage Company Limited (Pan Asian) is pleased to announce the launch of SuperFirst Mortgage Asset Receivables Transactions 1 Limited ("SMART 1"), a residential mortgage-backed securities ("RMBS") transaction backed by a HK$1.26 Billion portfolio of residential mortgages. In the first deal of its kind, Pan Asian is securitizing a portfolio of mortgages with loan-to-values (LTV) greater than 100%. Standard Bank Asia Limited is the Arranger and Book Runner for the transaction.

"We are excited to launch this innovative private residential mortgage securitization which showcases Hong Kong's leading role as financial innovator of asset-backed securitized products. Following our pioneering effort in launching the 140% LTV mortgage refinancing program and the one-stop 95% LTV mortgage program, we are now launching to investors a product which is ground-breaking not only in the local market, but globally. We are proud to be the leader in developing innovative financial products that meet international standards," said Leland Sun, Chief Executive Officer of Pan Asian.

"Refinancing mortgages with loan-to-values greater than 100% in 2002 and 2003 demonstrated Pan Asian's commitment and confidence in the local property market and the Hong Kong economy. The property market has shown significant capital value recovery and the number of negative equity cases has decreased substantially. Therefore, we believe that the timing of the launch of the RMBS is excellent," said Mr Sun.

This portfolio was originated between 2002 and 2003 and is well diversified with approximately 750 mortgages. The transaction is offering two classes of Notes, a Class A tranche of approximately HK$220 Million and a Class B tranche of approximately HK$40 Million. The Class A tranche is expected to be rated AA- / Aa3 while the Class B tranche is expected to obtain ratings of BBB / Baa2 from Standard and Poor's and Moody's respectively.

The indicative coupon rate of Class A is HK Prime minus 2.60% to 2.80% and Class B is HK Prime minus 1.25% to 1.50%. The Notes will pay interest monthly and are supported by a cash reserve fund and equity from Pan Asian. In addition, the deal features a "double-turbo" repayment mechanism which enables a faster principal repayment of the Class A and Class B Notes.

The RMBS deal is expected to close in mid-November.

Pan Asian has successfully pioneered innovative financial solutions to homeowners since its inception three years ago. The company introduced a 140% LTV mortgage refinancing program in 2002 that was very well received as it filled a need amongst negative-equity homeowners. In June 2004, the Company was the first to launch a one-stop 95% LTV mortgage program which ultimately helped to stimulate buying interest in the primary market and was quickly imitated by other service providers.

<Pan Asian RMBS Tranching Details - click to enlarge image>

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 unparalleled experience in real estate finance, asset and mortgage securitization in Asia, risk management, structured finance, international debt capital markets and local market funding.