KUALA LUMPUR, Dec 23 (Reuters) - Bumiputra-Commerce Finance Bhd, a unit of Malaysia's Commerce Asset-Holding Bhd , plans to raise 510 million ringgit ($134 million) by securitising its car loans, BasisPoint magazine said in its December 21 issue.
The Securities Commission has approved the deal, said to be the first securitisation of consumer assets in Malaysia, with the sale planned for early next year, BasisPoint, a Reuters company, said in its weekly publication.
Malaysia has only seen a handful of such deals. The most recent involve the securitisation of corporate loans by Affin Bank Bhd, real estate by Sunway City Bhd and rehabilitated bad loans by bad debt agency Pengurusan Danaharta Nasional Bhd.
Merchant banks like Commerce International Merchant Bankers Bhd (CIMB) and AmMerchant Bhd have also raised funds by securitising corporate bonds.
CIMB is expected to be the primary subscriber for the Bumiputra-Commerce Finance asset-backed bonds, which will be sold on a bought-deal basis.
Although Bumiputra-Commerce is raising 510 million ringgit, it will securitise car loans valued at 545 million ringgit to give added security to investors.
"The deal will securitise 545 million ringgit worth of auto loan receivables. Rights and benefits of the receivables are to be assigned to special purpose vehicle Auto ABS One Bhd," the magazine said.
Securitisation involves pooling debt for use as collateral or security against a bond issue, which cuts borrowing costs.
Bumiputra-Commerce Finance declined to comment on the BasisPoint report, which was unsourced.
Pricing for the bonds is expected to be tighter than the one billion ringgit securitisation by Affin Bank through Aegis One Bhd recently. That deal produced a yield of 5.2 percent. ($1=3.80) (Reporting by Shahriman Johari; Email: [email protected] Kuala Lumpur Newsroom +603 2275-6840))