It seems an unlikely deal at first glance a South Korean airline borrowing yen against its future Japanese ticket sales. With continuing tensions in North Korea, the fear that Sars may return in the winter and the Korean penchant for industrial action, it is a brave investor who bets that Korea Air Lines can keep up its repayments.
In recognition of this, KAL's 27 billion $234 million cross-border securitization will come with a full guarantee from the Korea Development Bank. Without it the deal would have been impossible to sell.
As recently as June 2003 the airline's revenue from its lucrative Japan routes slumped to 2.5 billion half the average...
