Korean consumer finance receivables topped the asset classes, comprising 54% of the total volumes in Asia. Most recently, Korean credit card issuer, LG Card, issued the first international securitisation of credit card receivables in December, totalling $475 million.
The renewed interest of monoline insurers in Asia’s securitisation market also played a part in the growth, Moody’s said. Monoline insurers provided financial guarantees on 65% of the total cross-border debt – all from Korea.
Looking ahead, Moody’s said it expects the market to continue its growth trend, estimating $3 billion of cross-border issuance, the bulk of which again is expected out of Korea. But the report also pointed to the synthetic collateralised debt obligation (CDO) market as a potential growth area in Singapore, due to increased bank merger activity and regulatory liberalisation. The Development Bank of Singapore (DBS) launched the first Asia ex-Japan balance sheet synthetic collateralised loan obligation (CLO) late last year, totalling S$224 million ($122 million) in tranched notes (see RiskNews November 27).
The report also points to increased activity in Malaysia and Taiwan in the coming year. Malaysia published guidelines for asset-backed securities (ABS) last April, while Taiwan is awaiting the ratification of ABS legislation, expected early this year.