Search results for

UK fund manager Prudential M&G this week priced the first ever sterling arbitrage collateralised debt obligation via Morgan Stanley Dean Witter. Although historically arbitrage deals were often associated with CDOs backed by high yield bonds and loans, the assets backing Panther CDO 1 BV are predominantly investment grade.

Doughty's Rank Hovis plan rewrites whole business rules. Although RHM owns 12 flour mills in the UK, and this property will be included in the deal, it will not be protected to the extent of assets such as motorway services where regulatory barriers protect competitors from setting up within 30 miles.

Banca Popolare di Bergamo (BPB) this week launched its second securitisation via a Eu331m deal backed by performing Italian mortgages and UK residential securities. Lead managed by Schroder Salomon Smith Barney, the deal priced amid an abundance of Italian issues in what looks set to be a bumper year for securitisation in the country.

Bank of America last Friday completed a £65m securitisation backed by consumer store cards and loans generated by Clydesdale Financial Services, the consumer credit division of high street retailer Next plc. The deal will finance the acquisition of Clydesdale Financial Services by Carnegie Holdings Limited, the joint venture which is 90% owned by Barclays Private Equity and 10% by Clydesdale's existing management.

Korea's government has announced the "second stage" of its financial restructuring programme, starting with the creation of two "super-banks". The merger of Kookmin and H&CB, apparently through the choice of its own CEOs, makes sense. But the creation of a holding company including Hanvit and a group of regional banks seems, at best, eccentric. But what seems practical elsewhere in the world doesn't necessarily work in Korea. By Chris Wright.

Singapore continues to keep its head above water but with total exports representing 135% of GDP the island-state remains extremely vulnerable. No better time to reach out beyond its Asean neighbours to consolidate its position within the global economy, reports Fiona Haddock.

The government view. Interview with Kap Soo Oh, assistant governor of the Financial Supervisory Service.

For three years he battled to implement a restructuring plan at Thai Petrochemical Industry, the country's biggest and most recalcitrant corporate debtor. Now following a landmark ruling from the Central Bankruptcy Court he has seized control of the corporation on behalf of creditors. Can Anthony Norman pull off the most important restructuring case in Thailand's recent corporate history? By Ben Davies.

The Bank of East Asia has launched what is expected to be the new benchmark for investment-grade subordinated debt offerings in the region. The US$550 million lower tier 2 placement is the largest sub debt deal in non-Japan Asia in the past 12 months. Sole bookrunner and lead manager was JP Morgan, with Barclays Capital acting as joint lead manager. The bond was carefully structured to utilize the efficient 10-year step-up five structure to avoid capital amortization. What this means is that BEA will be able to call the bond after five years when the regulatory authorities will start reducing the portion of the money raised to be allowable for capital adequacy purposes. This in effect means that if the bank held on to the bond proceeds after five years, it would be paying a premium for the funds.

Bank amalgamation continues apace in India with the recent merger of two domestic private sector banks – ICICI Bank and Bank of Madura. The share swap deal (at a ratio of two ICICI Bank shares to one Bank of Madura share) took effect on February 1, with ICICI effectively the acquiror. The deal is the second private sector bank merger in recent months – HDFC Bank acquired Timesbank last year – and the trend is expected to continue. Furthermore, three foreign banks – HSBC, Standard Chartered and BNP Paribas – have shown interest in purchasing Indian banks, provided the regulatory framework is in place. It's not yet clear, however, whether the Reserve Bank of India (RBI) would approve such a move.

Just as it looked like HSBC Holdings would acquire a 75% controlling stake in ailing Bangkok Metropolitan Bank (BMB), both sides announced on December 29 that the deal was off, citing irreconcilable differences over the tax treatment of restructured loans. HSBC's demands for more favourable terms were deemed unacceptable by Thailand's Financial Institutions Development Fund (FIDF), which has already spent an estimated Bt1.3 trillion (US$30.1 billion) bailing out banks and finance companies that collapsed at the height of the crisis. "By the end, it looked like the FIDF would virtually have to pay HSBC to take the bank off its hands," says one source close to the negotiations. "That was politically unacceptable." In retrospect, the sale of BMB was never going to be easy. As of November, non-performing loans at the bank amounted to 57.9% of total loans, according to the FIDF. In reality, that figure may have been considerably higher, raising question marks not only about the asset values at BMB, but at the other domestic banks. To date, both sides have kept a tight lid on their discussions. HSBC has made it clear, however, that whilst disappointed by the outcome, it continues to view Thailand as a country of considerable strategic importance.

The board of Reliance Industries, one of India's largest companies, has passed an enabling resolution to increase the company's foreign shareholding limit from 24% to 40%. A company spokesman said that the board resolution would be considered at the next annual general meeting of its shareholders, likely to be held in June or July. The same source declined to comment on the reason behind the decision which, at first glance, seems somewhat unwarranted since foreign investors hold just 14% of the company's shares - well short of the 24% limit. (The family of the company's Indian chairman, Dhirubhai Ambani, controls 40% of the stock following a recent 2% acquisition and has announced plans to raise its holding to 51% over the next few years.)