South Korean air carrier Asiana Airlines has floated $370 million of asset backed securities (ABS) on the Irish Stock Exchange with the aid of assorted law firms on English, Korean, Japanese and Cayman laws.
The deal is the first Korean airline to issue U.S. dollar-denominated ABS primarily backed by ticket sales of Asiana’s flights between Korea and Japan that are denominated in yen. The notes, issued on March 15, were priced at a five-year floating coupon rate of one month U.S. dollar Libor plus 300bps. The papers will mature in 2017, with a weighted average life of 2.6 years.
The notes were issued by OZ Wing II Cayman Ltd, a Cayman Islands-incorporated special purpose vehicle that used the funds to buy yen-denominated variable rate debt issued by a Korea-incorporated special securitisation company. This company then acquired an investor beneficial certificate from Asiana, its originator.
“This is the first five-year transaction backed by a Korean airline company’s passenger ticket sales in Japan since the first cross border ABS of this kind was issued in 2000,” said Chang Soo Han, executive vice-president and CFO of Asiana Airlines, in a statement from Standard Chartered Bank, one of the swap’s providers.
The issuer picked Orrick, Herrington & Sutcliffe as its English law counsel, and Walkers for Cayman Islands law advice.
The joint lead arrangers, Standard Chartered Bank and the Korea Development Bank (KDB), meanwhile engaged Orrick for English and Japanese laws, and turned to Kim & Chang for Korean legal advice.
The Orrick team was led by Michelle Taylor, a Hong Kong-based partner and head of the firm’s Asia structured finance and securitisation team. It included Toshihiko Tsuchiya, Donna Healy, Eugene Chang, Kevin Tsang and Yuko Ino.
DB Trust Company, the Japanese trustee for the deal, retained Anderson Mori & Tomotsune as its Japanese counsel,while the credit facility provider, KDB, sought Linklaters for English legal advice.
This swap is Asiana’s sixth cross border securitisation since its first issue in 2000, and KDB’s second airline-related securitisation advised by Orrick. In November 2011, the U.S. firm helped KDB on a landmark Korea Airlines future flow securitisation.
“We have seen a significant rebound in securitisation matters recently, with Korea remaining one of the most active markets in Asia. We are pleased to be able to assist our long-time clients in these challenging, multijurisdictional transactions,” said Taylor of Orrick. ALB
Artemisia Ng is Senior Journalist at ALB. Follow us on Twitter: @ALB_Magazine.
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