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CIBC World Markets (CIBC WM) and Macquarie Bank Limited (Macquarie) today announced the issuance of mortgage linked loan certificates by CLN Corporation Pty Ltd.
CLN Corporation Pty Ltd is a special purpose vehicle company managed by CIBC WM and was incorporated for the purpose of providing credit enhancement facilities to Asset Backed Securitisation Corporation Limited (ABSC), a multiseller securitisation conduit sponsored by CIBC WM. ABSC currently has assets of over AUD1.8billion and is rated A-1+/P1/F1 by Standard & Poor's, Moody's and Fitch respectively.
In the first of a series of transactions arranged by CIBC WM and lead managed by Macquarie, CLN Corporation is providing credit enhancement as a syndicated lender to a subsidiary of ABSC Corporation that holds A$250,000,000 of Australian mortgage backed securities.
In order to collateralise its obligations under the syndicated loan, CLN Corporation has issued A$8,125,000 of mortgage linked loan certificates linked to the default performance of specified mortgage backed securities. Macquarie has placed the mortgage linked loan certificates with investors. The transaction was structured to ensure that ABSC retained its A-1+/P1/F1 rating. Pricing for the transaction was not disclosed.
Anton Le Rutte, Executive Director Asset Securitisation at CIBC WM said "This innovative transaction allows CIBC World Markets to syndicate its credit enhancement facilities to ABSC and improve its capital efficiency. CLN Corporation provides a structure to tap the capital markets for long term committed credit enhancement facilities in the future."
Robert Harris, Associate Director Debt Markets at Macquarie Bank said "This transaction is the first time that credit default swap technology has been used by a securitisation conduit to transfer default risk to investors synthetically via a public issue of credit linked securities. It demonstrates the increasing sophistication of investors to assess structured credit risk and the growing appetite of the market for leveraged default risk products."
For further information please contact the following:
Anton Le Rutte, Executive Director, CIBC World Markets +61 2 9375 1317
Robert Harris, Associate Director, Macquarie Bank +61 2 8232 9992
Lisa Jamieson, Public Relations Manager, Macquarie Bank +61 2 8232 6016
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