A unit of
has entered into a USD200 million
cross-currency swap on the back of an asset backed security it
issued in the U.S. The ABS securitized won-denominated
auto-installment credit, but the bond pays a dollar-denominated
coupon. As a result, in the five-year swap, the special purpose
vehicle issuing the securities pays a fixed Korean won rate, 7.14%,
and receives a margin over U.S. dollar LIBOR.
counterparty in the deal.
Kim, manager of the financial planning
in Seoul, said Samsung chose ING because it was the
first to bring up the idea of issuing an ABS overseas and was able
to provide a line of credit for the swap transaction.
ING subsequently hedged at least a portion of
this swap by entering into a series of other five-year swaps.
The ABS was issued in the U.S.
in order to get better pricing, said Samsung's Kim.