Taiwan’s Polaris Securities launches CBO

Polaris Securities has closed its first collateralised bond obligation (CBO) transaction in Taiwan worth NTD12.2 billion ($375 million).

The transaction, which was sold through public offer in Taiwan, comprises seven classes of trust certificates issued via a special purpose trust established under the Financial Asset Securitisation Law. The five most senior classes, all due in 2013, are rated between AAA and BBB by Taiwan Ratings Corporation.The underlying asset pool comprises 19 Taiwan dollar-denominated notes, nine Taiwan dollar fixed-rate bonds, as well as a US dollar synthetic credit pool referenced to the Dow Jones CDX NA IG Series 5, a credit default swaps index referencing the most liquid investment-grade entities domiciled in North America.The AAA-rated Class A1 notes, worth NTD7.15 billion, pay a coupon of 2.08% per annum; the NTD1.785 billion Class A2 notes, also rated AAA, pay a coupon of 2.3%; the AA-rated Class B notes, worth NTD1.08 billion, pay a coupon of 2.32%; the NTD1.09 billion A-rated Class C notes pay a coupon of 2.35%; and the NTD570 million BBB-rated Class D notes pay 2.45% per annum.Brad Levitt, group head of capital markets at Standard Chartered, which acted as the financial adviser, lead manager and hedging provider of the transaction, said in a statement: “Our asset securitisation, debt capital markets, credit trading and structuring and other capital markets teams tailor-made this CBO to meet Polaris’ special needs and the demands of local investors as well.”