Asiana Airlines closes $370 million ABS deal

Victoria
By Victoria March 16, 2012 16:55

Asiana Airlines closes $370 million ABS deal

Asiana Airlines has raised $370 million from an asset backed securities (ABS) deal, the first Korean airline to issue US dollar-denominated ABS predominantly backed by yen-denominated air-ticket receivables.

The airline has priced the five-year floating rate notes at 300bp over one-month USD Libor issued on March 15. The transaction, with a weighted average life of 2.6 years and listed on the Irish Stock Exchange, represents the securitization of passenger ticket sales mostly on Asiana’s Japan route.

“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,” Chang Soo Han, executive vice-president and CFO at Asiana Airlines, said in a statement from Standard Chartered Bank, one of the joint lead managers (JLMs), together with the Korea Development Bank (KDB). They are also the swap providers.

Under the structure, the issuer of the transaction is OZ Wing II Cayman Limited, a newly established, bankruptcy-remote, special-purpose company incorporated in the Cayman Islands. With the floating-rate notes, OZ Wing II used the funds to acquire yen-denominated variable-rate bonds issued by a special securitization company incorporated in Korea, which then bought an investor beneficial certificate from the originator, Asiana Airlines.

In addition, the notes benefit from KDB’s unconditional and irrevocable yen-denominated credit facility until maturity, set to cover the principal balance of the underlying bond, the yen fixed payments under the interest-rate swap, senior fees and expenses.

Victoria
By Victoria March 16, 2012 16:55
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