Taipei-based Industrial Bank of Taiwan, with assets totaling over TWD52 billion (USD1.56 billion), is looking to close its first investment in a synthetic collateralized debt obligation within six months. Eric Lin, head of structured finance, said it is also looking to understand the ins and outs of the product because it aims to be able to structure domestic CDOs in-house within a year.
"We're not just looking at the pricing or profits, we're also looking for some transfer of knowledge--we want the total package," said Lin. While IBT is still in the initial discussion stage with potential counterparties, he noted that it will likely invest USD10-30 million in a rated tranche, primarily referenced to U.S. names. He continued that it is too early to comment on the type of structure.
IBT is speaking with six international houses in regards to CDO transactions, which Lin declined to name. The bank has been eyeing CDOs for over a year (DW, 12/9/02) but has been delayed because it focused on other products such as CLOs. IBT is finalizing a TWD5-6 billion collateralized loan obligation, which it is structuring internally and should hit the market in March.
