Standard Chartered Completes Third CLO For Asia, Mideast
By Kartika Rahman

Bandar Seri Begawan - Standard Chartered has completed its third Collateralised Loan Obligation (CLO) -the Start III CLO - in just over 12 months on the back_ of two previous award winning CLO transactions.

"This CLO issuance reflects the continued growth of the Bank's Wholesale banking franchise in Asia, Africa and the Middle East, said Alex Thrusby, Senior Managing Director, Group Head of Client Relationships, Wholesale Bank, Standard Chartered. "Through our portfolio management activities this CLO allows us to satisfy our substantial investor base that wants access to our pooled Asian, Middle East and African Client loan investors."

Thrusby added that Start III CLO offers investors exposure to a broad international spread of corporate loans extended by the Bank. "More importantly, investors enjoy the benefit of the Bank's expertise in lending, risk management and loan workout," he said in his statement.

"There is strong market reception to Start III CLO which references Asian and Middle Eastern risk, offering investors a diversification play. Start III CLO has primed investors' appetite for such transactions referencing corporate loans from Emerging Markets.

"With this latest US$1.5-billion synthetic CLO, - Standard Chartered has sold the credit risk of a diversified pool of corporate loans extended to more than 400 borrowers with about 80 per cent of the borrowers from Asia, while the rest are from the Middle East. The average credit quality for the pool is BB-/ Bat- and weakest credit grade allowed in the pool is Caal/B-," said the Senior MD.

"This transaction was jointly arranged and distributed by Standard Chartered Bank and Lehman Brothers under Rule 144A and Regulation S."

The deal attracted a broad base of investors, both geographic and type, he said, adding that 22 per cent of allocations were to US investors-for the Bank's first 144A transaction. In addition, 45 per cent of allocations were to European investors, 30' per cent to Asian (including Australia and New Zealand), and four per cent to Middle Eastern investors. There were 45 investors in total, of which 21 were new to the Start programme.

Standard Chartered completed its first CLO in November 2005, Start CLO, which referenced a US$2billion portfolio of loans. This was followed up in June 2006 with Start II CLO that referenced a US$1.6 billion portfolio.-- Courtesy of Borneo Bulletin

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