Group, has insured Asian Recovery Limited for $25 million of securities.

Centre's insurance policy guarantees any shortfall in interest and principal payments made by Asian Recovery to the mezzanine securities. This makes the notes more attractive to international institutional investors who may not have been prepared to risk buying sub-investment grade securities.

Standard & Poor's has assigned the notes, which would otherwise be rated non-investment grade, a double-A rating based on Centre's insurance policy.

Centre Solutions issued a statement that Asian Recovery was a special purpose vehicle established to buy a diversified portfolio of Asian corporate bonds as part of a transaction arranged by Morgan Stanley Dean Witter Asia Limited.

Income Partners are to act as collateral manager for the pool of Asian corporate bonds.

The cash-flows of the purchased bonds have been securitised in the CBO (collateralised bond obligation) structure.

Centre's managing director responsible for Asia, Bryan Bowers, said the group was committed to providing credit enhancement solutions for clients.

"The Asian Recovery initiative is precisely the sort of ground-breaking concept that we are looking to work on in the region,'' he explained.

"Recently, investors in mezzanine Asian debt have been thin on the ground.

"This insurance, which transfers the risk of interest and principal nonpayment, will create a more liquid market for these bonds and indeed the underlying corporate bonds.'' He likened the policy to a "catalyst'' which would create a more active market in Asian corporate debt securities and in the longer term prompt a more active market to bring down pricing levels and reduce the cost of borrowing.