BNP Paribas has won a string of key mandates in Korea in recent days, two of which involve Shinhan Financial Group.
The first deal is a $400 million mandate for Shinhan Card. The deal, which is expected to be launched in July or August, is an asset backed security. It will not be wrapped, but following the trend this year will be supported by a BNP conduit. It is the first ABS transaction that BNP has been mandated on this year.
However, it will be closely followed - probably in August or September - by $500-750 million ABS for Shinhan Bank. This again will involve a BNP conduit and will be backed by a portfolio of the bank's personal loans.
Market sources reckon the two deals combined will amount to over $1 billion and will be a massive improvement for BNP's ABS team over 2002 when it launched a $266 million primary CBO for Coro Voltin.
The bank's securitization team was in fact founded last May, and comprises a team of four, led by Razi Amin - who between 1996 and 2001 had led Merrill's ABS effort.
Winning the Shinhan mandates is a major coup for the team and also demonstrates the power of relationships. BNP has been close to Shinhan since 2001 when it took a 4% stake in the Korean bank, gained a board seat and formed joint ventures in consumer credit and bancassurance.
Unusually enough, BNP combines its securitization efforts with its principal finance business in one group, and in the latter case the bank has also made strides in Korea. It has just bought a portfolio of personal loans from Korea First bank. This NPL portfolio includes 66,000 debtors and has a face value of W170 billion ($141.5 million). Market talk says the portfolio has bought at less than 20 cents in the dollar.
As with Goldman Sachs, Merrill Lynch and Lone Star - who are also active in this area in Korea - the portfolio is being bought to resolve and work out, and not to securitize.
BNP refused to comment on the rumoured transactions.
