Life Securitization Awarded Nikkei's ABS Deal of the Year 2001
Morgan Stanley's securitization of consumer loan assets originated by Life, a failed consumer credit firm, was awarded the Nikkei's "Deal of the Year 2001" in the Structured Products/Asset-Backed Securities (ABS) category. Morgan Stanley acted as arranger and sole-lead manager for the offering, which was completed in October 2001.
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Morgan Stanley's securitization of consumer loan assets originated by Life, a failed
consumer credit firm, was awarded the Nikkei's "Deal of the Year 2001" in the
Structured Products/Asset-Backed Securities (ABS) category. Morgan Stanley acted as
arranger and sole-lead manager for the offering, which was completed in October
2001.
The JPY 245 billion securitization of Life's assets was the largest-ever asset-backed
deal in Japan's history. More importantly, this transaction concluded the first Japanese
acquisition financing structured specifically for a securitization takeout.
Life Funding, which achieved AAA-BBB ratings from four rating agencies, was the first
large Yen ABS deal following September 11 and the collapse of major Japanese retail
group, Mycal Corp. In spite of difficult market conditions, the deal was well received by
investors because of its favorable terms. "The deal's solid marketing and creative
structure gained broad support from investors both in Japan and overseas," said a
Japanese institutional investor.
The securitization followed the development by Morgan Stanley of a transaction
structure that enabled Aiful to acquire Life by extending acquisition financing
collateralized by Life's assets. The securitization's funds were used to repay the
original acquisition financing.
"This transaction was a milestone in the development of the Japanese securitization
market," said Eric Ellison, co-head of the Securitized Products Group in Tokyo. "This
transaction not only demonstrated our ability to execute complex securitizations, but
also established a model for the use of securitization to aid corporate restructuring in
Japan."
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