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Supporting Securitization of Credit Card Receivables in Thailand
Helping Japanese Companies Diversify Funding Sources and Develop Local Securities Market

  • Region: Asia
  • Manufacturing and Services
  • Securitization and Other Financial Instruments
  • Guarantees
NR/2013-15
May 21, 2013
  1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) has participated in a securitization transaction of the credit card receivables originated by AEON Thana Sinsap (Thailand) Public Company Limited (ATS) which is a subsidiary of AEON Financial Service Co., Ltd and headquartered in Bangkok (the Transaction).*1 JBIC acquired 50 million U.S. dollars worth of an asset-backed security (ABS) and guaranteed the financings, consisting of 30 million U.S. dollars worth of ABS provided by private investors, and 20 million U.S. dollars worth of an asset-backed loan (ABL) provided by commercial banks. 
     
  2. Since October 2008, JBIC has started securitization operation in addition to its conventional financial operations, such as loans and guarantees, in an effort to supplement private financial institutions operations and make effective use of new financial instruments. This Transaction is the first securitization deal with the investors outside Thailand for ATS and the first credit card receivables securitization deal for JBIC. With JBIC's partial acquisition and guarantee provision to the securitized products, this Transaction is expected to contribute to meeting the needs of ATS for diversification of funding as well as to providing investment opportunities to private investors in the market with the mitigated country risk and structuring risk by JBIC's participation.
     
  3. In addition, this Transaction will help, through diversification of the funding methods, stabilize ATS's consumer credit business mainly composed of credit card and sales financing. This will help improve the business conditions of sales operations for the Japanese makers selling their durable consumer goods in Thailand, which is expected to maintain and improve international competitiveness of Japanese corporations.
     
  4. Furthermore, this Transaction meets one of the nine priority areas agreed upon in the "New Roadmap+*2" of the Asian Bond Market Initiative (ABMI),*3 which is, efforts for "Enhancing financial access to consumers and Small and Medium Enterprises (SMEs)." Strengthening ATS's consumer credit business will contribute to the improvement of accessibility to finance of domestic consumers in Thailand.
     
  5. JBIC will continue to support Japanese industries for maintaining and improving their international competitiveness by drawing on market-oriented financial schemes, including support for structuring securitization deals in emerging countries.
Note
  1. *1 Although a whole set of contracts on this securitization deal had been signed on May 16, 2013, this Press Release was issued today after completion of all the relevant processes, including payment of the funds on May 20, 2013.
  2. *2 This was set forth in the Joint Statement of the 15th ASEAN+3 (Japan, People's Republic of China and Republic of Korea) Finance Ministers and Central Bank Governors' Meeting issued in May 2012.
  3. *3 The Asian Bond Market Initiative (ABMI) was proposed by the Government of Japan in December 2002 as a measure to prevent the recurrence of the Asian currency crises and channel the funds in the Asian region, which has a high saving rate, to intra-regional investments, thereby developing and activating bond markets in a number of Asian countries. Currently, it is making progress in the framework of ASEAN+3 (Japan, People's Republic of China and Republic of Korea).

 

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