Chinatrust Commercial Bank’s T$5bn residential mortgage-backed securitisation
Lehman Brothers was sole arranger, and co-lead managing underwriter with Grand Cathay Securities Corporation
In the first public offering of a RMBS transaction in Taiwan, Chinatrust successfully took a T$5bn deal to market, which was snapped up by investors.
Despite pooling residential loans that were representative of the overall loan portfolio, and therefore riskier than a specially selected portfolio, the deal achieved excellent pricing at execution, at nearly 40bp better than competitors that had pursued private placements.
In a pioneering move, Chinatrust and its advisers negotiated rulings and regulatory enhancements to permit the offering, and also played a pivotal role in negotiating rating agency standards for RMBS issuance.
