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Chang JuliaChongHui (D1) : PPT

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  • 1. Korea Asset Management Corporation KAMCO’s Real Estate ABS in Korean Market Ms. Julia Chong Hui Chang General Manager, International Business Dept. Korea Asset Management Corporation(KAMCO), Korea
  • 2. Korea Asset Management Corporation II. KAMCO’s Role in the Financial Sector Restructuring III. Classification of NPL Ⅰ . Real Estate Securitization Market in Korea IV. ABS Issues by KAMCO & Case Studies
  • 3. I. Real Estate Securitization Market in Korea Korea Asset Management Corporation I-1. KAMCO’s Ordinary Loan Disposition Methods I-2. Korean Real Estate Securitization Market in General (1999.1 ~ 2000.7)
  • 4. Korea Asset Management Corporation I-1 . Real Estate Securitization Market in Korea (Unit : KRW in bn) Bulk sale ABS Issuance Court Auction, Public Sales Sale to AMC (JV) Sale to CRC (JV) Collection Individual Loan Sales Recourse & Cancellation Total Resolution Methods Accumulated Resolution Face Value Purchase Value Recovery Value 2,162 493 8,045 735 600 6,386 114 3,271 21,806 939 193 268 202 87 2,409 1,650 1,878 7,626 966 196 402 292 114 2,942 2,683 1,878 9,473
    • KAMCO’s Ordinary Loan Disposition Methods
    Source : KAMCO white paper, 2001.12
  • 5. Korea Asset Management Corporation I-2 . Korean Real Estate Securitization Market in General
    • Real Estate ABS Market (1999.1 ~ 2000.7)
    ※ ABS Issuers : KAMCO, Housing & Kookmin, IBK, Agricultural Bank, Mutual Saving Banks, etc. 6.52% 3.1% 8.21% 11.7% 12.3% 21.16% 37% ※ Restructured corporate loan Koland assets Residential mortgage Ordinary secured Lease receivable Real estate trust receivable Construction receivable
  • 6. II . KAMCO’s Role in the Financial Sector Restructuring Korea Asset Management Corporation II- 1. KAMCO’s Role II -2 . KAMCO’s Resolution Strategies
  • 7. Korea Asset Management Corporation Early Recovery of Public Money
    • Provide Liquidity and Restore Financial Stability Revitalize Korean Economy
    Inject Public Money Resolve NPLs Minimize Public Burden Support Normalization Assist Restructuring Financial Institutions Investors Government /National Tax Acquire NPLs Corporate II -1 . KAMCO’s Role in the Financial Sector Restructuring
  • 8. Korea Asset Management Corporation II- 2. KAMCO’s Resolution Strategies
    • Suspension of legal action
    • Suspension of foreclosure procedure
    • Lend working capital
    • Debt for equity swaps
    • Payment guarantees
    • Purchase promissory notes
    • Corporate Restructuring Company
    • Asset Management Company
    • Corporate Restructuring Vehicle
    Analysis of NPLs
    • Portfolio sales(Int’l Bidding)
    • Securitization (ABS)
    • Public sales
    • Foreclosure sales
    • Individual Loan sales
    • Discount outstanding principal balance
    • Reduce interest rate
    • Extend payment maturity
    Disposition Rehabilitation Rescheduling Joint Venture
    • Principles & Policies
    Speedy, loss minimizing and value upgrading resolution Efficient management, transparent procedures and fair transactions Strategies
  • 9. III. Classification of NPL Korea Asset Management Corporation III- 1. KAMCO’s Asset Types III -2 . Secured Ordinary Loans - “Property” Play
  • 10. Korea Asset Management Corporation
    • KAMCO has 4 Types of Assets
    III-1 . Classification of NPL Ordinary loans Secured ordinary loans Unsecured ordinary loans Secured Restructured corporate loans Unsecured restructured corporate loans Restructured corporate loans Secured Unsecured Court approval Collateral
  • 11. Korea Asset Management Corporation III-2 . Classification of NPL Ordinary loans Loans currently delinquent for 3 months or longer whether they are secured or unsecured. Secured Ordinary Loans were securitized Loans which have obtained court approval for restructuring as part of corporate re-organization or composition proceedings whether they are secured or unsecured. Restructured corporate loans Obligor’s payment schedule is approved by Bankruptcy Court and agreed upon by creditors Collateral value is already reflected in obligors’ payment schedule
    • Secured Ordinary Loans are “Property” Play
    • Restructured Loans are “Corporate” Play
  • 12. IV. ABS Issues by KAMCO & Case Studies Korea Asset Management Corporation IV -1 . Joint Venture SPC with Private Investor IV-2. Structure for KAMCO ABS Issuance IV-3. Case study 1 : KAMCO 2000-4 Discounted Cash Flow (DCF) IV -4 . Case study 2 : Resurgence Korea One ( first real pass-through payment )
  • 13. Korea Asset Management Corporation IV-1 . Joint venture SPC with Private investor KAMCO Investor SPC KAMCO 50% : Investor 50% AMC KAMCO 35% : Investor 65% NPLs cash Asset Management Contract
      • Why joint venture SPC for NPL resolution ?
      •  For easier transfer of mortgage & REO, and stamp duty exemption
    cash
  • 14. Korea Asset Management Corporation IV-2 . Structure for KAMCO ABS Issuance SPC (Shell com.) Obligors (2) Securities (4) Proceeds (5) Proceeds (1) True Sale (1) Notice of loan transfer to SPC (6) Payment Lead Manager Disposed Asset Mgt Dept Credit Enhancer Trustee Legal Advisor Financial Advisor Rating Agency (3) Securities (3) Proceeds Investors Financial Supervisory Commission (FSC) Register to KAMCO
  • 15. Korea Asset Management Corporation IV-3 . Case study 1 : KAMCO 2000-4
    • ISSUER:
    • ASSET:
    • SIZE:
    • COUPON RATE:
    • RATING:
    KAMCO 2000-4 Securitization Specialty Co. Ordinary Secured Loans KRW 257.0 bn(3 tranches) with 57 bn Subordinated notes Govt Bond +20bp /+90bp
    • LEGAL MATURITY:
    • LISTING:
    • NOTES OFFERD:
    • CREDIT FACILITY PROVIDER:
    1 Year/2 Year Kookmin Bank(KRW 80 bn) Korea Stock Exchange In KRW AAA / AA / na
    • REPAYMENT PRINCIPLE:
    Pay Through Basis
    • SELLER:
    KAMCO
    • CREDIT ENHANCEMENT:
    50 bn cash reserve
    • LEAD MANAGER:
    • ISSUE DATE:
    Seoul Securities, SK Securities 19 July 2000
    • ORIGINATING BANKS:
    Commercial banks in Korea(Creditor banks)
    • MASTER SERVICER:
    KAMCO
  • 16. Korea Asset Management Corporation IV-3 . Case study 1 : Discounted Cash Flow (DCF)
    • Valuation Process by Discounted Cash Flow Method (DCF)
    • NPL in FV
    • (KRW 741.2 bn)
    • Auction and Collection Simulation
    • Estimated Cash Inflow
    • (KRW 282.5 bn)
    • Discounted
    • Yield on
    • Corporate Bond
    • Spread
    • of 1%
    • Valuation
    • (KRW 254.9 bn)
      • Cash Flow estimated by applying Court Auction statistics by property type and location
      • Derived Investment Value: KRW 254.9 bn
    ※ Appraisal value analysis Number of Obligors: 1,483 Number of Collaterals: 1,744 46.7% value were from 258 factories Only 11.3% were from residentials
  • 17. Korea Asset Management Corporation IV-4 . Case study 2 : Resurgence Korea One
    • ISSUER:
    • ASSET:
    • SIZE:
    • COUPON RATE:
    • RATING:
    Resurgence Korea One Securitization Specialty Co. Real Estate & Mortgages purchased from KAMCO KRW 174.9 bn(3 tranches) with 64 bn Subordinated notes 5.51% / 6.51% / 7.52%
    • EXPECTED FINAL MATURITY:
    • LISTING:
    • NOTES OFFERD:
    • CREDIT FACILITY PROVIDER:
    Feb 2002 / May 2002 / May 2002 (legal maturity:Nov. 2005) Korea Development Bank (KRW 17.5 bn) Korea Stock Exchange In KRW AAA / AA / A
    • REPAYMENT PRINCIPLE:
    On a Pass Through Basis
    • SELLER:
    Morgan Stanley’s Conduit
    • CREDIT ENHANCEMENT:
    Servicer Advance by Morgan Stanley
    • LEAD MANAGER:
    • ISSUE DATE:
    Morgan Stanley Dean Witter, Seoul Branch 19 Oct. 2001
    • ORIGINATING BANKS:
    Commercial Banks in Korea
    • MASTER SERVICER:
    Morgan Stanley
  • 18. Korea Asset Management Corporation IV-4 . Case study 2 : Resurgence Korea-One ABS Issue Structure ( 2-Tier ABS ) MSDW Tornado Inc. MSDW Xian Inc. KAMCO ISSUER INVESTOR Asset transferred Asset transferred Subordinated ABS Subordinated ABS Senior ABS Asset transferred Asset transferred
  • 19. Http : www.kamco.or.kr Asem Tower, World Trade Center, 159-1 Samsung-dong, Kangnam-ku, Seoul, Korea Phone: 82-2 2103-6131 Fax: 82-2 2103-6149 e-mail: chchang@kamco.or.kr Thank You ! All rights reserved, Korea Asset Management Corporation