S&P-- Tough Times Befall Asian Securitization Market.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 10, 2003

(Standard & Poor's)--Although the years of explosive growth and enthusiasm in many of Asia's structured finance markets are devolving into sobering times as financial and economic stresses persist, several rays of hope are shining through, according to a recently released report by Standard & Poor's Ratings Services.

The article, titled, "Tough Times Befall Asian Securitization Market," says that some of the optimism comes from the rising popularity of synthetic CDOs and the promise of substantial issuance of RMBS in Taiwan. "But collectively, issuance in South Korea, Singapore, Hong Kong, and Taiwan, is coming at a far slower pace than in previous years because of slower growth of consumer financial assets and higher levels of bad debts and bankruptcies," said credit analyst Diane Lam, a director in Standard & Poor's Structured Finance Ratings group in Hong Kong.

The article gives a snapshot of the challenges and varying degrees of success occurring in the region, as well as Standard & Poor's ratings activities in those markets. In Taiwan, recently passed legislation is bringing the real estate sector into its securitization market. Singapore, although experiencing a lull in activity, is serving as a launching ground for synthetic CDOs, one of the fastest-growing asset classes in the region. The consumer credit situation in Hong Kong, on the other hand, continues to deteriorate. As a result, a noticeable slowdown in issuance for securitization, particularly with mortgage loans and other consumer assets, is being witnessed.

The South Korean ABS market has been at the center of the bearish sentiment from investors, largely due to a projected economic slowdown, the fact that consumer bad credit has not yet reached its bottom, and continuing political tension with North Korea. Also, for some issuers, the rise in delinquencies and defaults has been magnified by company strikes, which affect collections. "The Korean card issuers are not looking to add more ABS until later in the year, if at all, mainly because they are shrinking their balance sheets. In addition, some issuers are finding it difficult to generate eligible assets to maintain the revolving structures of many cross-border ABS or have breached triggers," said Ms. Lam.

"Tough Times Befall Asian Securitization Market," is available on RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. It is also available on Standard & Poor's Web site at www.standardandpoors.com. Click on "Credit Ratings," then under "Browse by Business Line" click "Structured Finance," and under "Commentary & News," scroll down to the Sept. 10, 2003, article.

Copyright (c) 2003, Standard & Poor's Ratings Services