1. Taiwan Securitization Market Developments
Diane KY Lam, CFA
Director
Structured Finance Ratings
(852)
Taipei
July 7th 2004
Agenda for today
talk about S&P approach to rating CDO

2. Significant Milestones in Taiwan Securitization
 Financial Asset Securitization Law (FASL) Jun-02
 Insurance regulations allowing Jan-03 / Sept-03
 investments into structured products
 structured according to FASL and further amended
 1st Taiwan Securitization Feb-03
 (single tranche Collateralized Loan Obligation N$2.766B)
 Real Estate Securitization Law Jul-03
 Tax exemptions on commercial paper Dec-03
 1st Taiwan cross border securitization Dec-03
 (dual currency, dual ratings)
 1st Taiwan NT$ residential mortgage backed securities Mar-04
 ( multi-tranche, prepayment risk, longdated maturity, NT$4.28B)
 1st Taiwan real estate securitization Jun-04
 (single building,office, NT$2.13B)
 1st T-REITS - Fubon REITS (announced) Jun-06

3. Rated Volumes by Asset Type Year 2003 to YTD 2004

4. Taiwan Total Rated Volumes from Year 2003 - 30June2004

5. Turning Point for Taiwan - 2004
 One of Asia’s bright spots for securitization
 Deals can be completed in shorter timeframes
 Regulatory authority, tax authority remain strong supporters of ABS
 Knowledge of ABS is deep amongst market professionals
 Market has definite potential to test new grounds in 2004 and beyond:
» New assets (trade receivables, autoloans, leases, commercial paper, NPL, credit default swaps, credit linked notes, various types of structured notes, catastrophe bonds)
» New structures (asset backed commercial paper, synthetic ABS, multi-pool real estate securitization, master trust, combination notes)
» New funding (commercial paper, principal guaranteed)
» New investors (funds, insurance, corporates, conduits and also, high net worth individuals)
» New class of originators (corporates and insurance companies, funds management, M&A/privatization)
» Expanding service providers (back-up servicers, trustees, swap/hedge counterparties)