Shinhan Card has raised €300 million through the sale of bonds backed by a revolving pool of credit card receiveables, marking the first time that a Korean issuer has tapped the euro market. The bonds are arranged by BNP Paribas and placed privately through its Thesee conduit, which issues short-term asset-backed commercial paper in France.
The bonds have an expected maturity of five years, comprising a four-year revolving period and a 12-month controlled amortization period. They are rated AA- by Standard & Poor's, Aa3 by Moody's and AA- by Fitch based on a credit-enhancing 28% subordinated seller interest retained by Shinhan Card.
BNP Paribas acted as the swap counterparty for the won-to-euro exchange. The commercial paper is rated A1/P1/F1 based on the stand-by liquidity facility provided by BNP.
The bond issuer is Shinhan Card 2003-1 Securitization Specialty, a Korean special purpose company. Shinhan Card is a fully-owned subsidiary of Shinan Financial Group, a holding company, and was spun-off from Shinhan Bank in June 2002. BNP has a joint venture with Shinhan through the Shinhan BNP Investment Management Trust.
It is only the second cross-border Korean securitization offering that BNP has been involved with. The first was last year's $350 million collateralized bond obligation through the Coro Voltin fund, which was launched in November.
BNP's structured finance team also deal with distressed debt work and in June the bank bought up a portfolio of non-performing loans from Korea First Bank in a competitive auction. The loans had an outstanding principal balance of $140 million but it is thought BNP got them for a substantial discount.
