Thai Housing Authority Wraps Up First Securitisation Deal.

Byline: Chiratas Nivatpumin

Dec. 6--The National Housing Authority is set to complete Thailand's first asset-backed commercial paper deal, which will result in the issuing of 607.9 million baht worth of debuntures.

Under the deal, put together by the investment bank Devonshire Capital, a special purpose company, NHA SPV, will issue the amortising debentures over a 10-year period. The bonds will be backed by hire-purchase receivables with a book value of 668.8 million baht.

Oliver Hughes, head of corporate finance (debt products) at Devonshire Capital, said the agreement represented the first true Thai securitisation deal.

Bonds issued by NHA SPV will be purchased by another special purpose vehicle, Osprey Series I Co, which will finance the bond purchases through the issue of short-term debentures or commercial paper with terms of up to 270 days.

The assets will continue to be serviced by the NHA, which will also offer buyback support of up to 75 percent of the book value of the assets to cover defaulted receivables. A reserve and retention fund was also established to enhance ratings, assigned by Fitch at A+ (tha) for the NHA SPV bonds and F1 (tha) for the Osprey short-term paper programme.

Under securitisation, assets are sold by an originator to a special purpose vehicle. Bonds are issued by the SPV to cover the purchase of the assets. Revenues from the assets are passed on to bond holders to cover interest and principal payments.