The three lead underwriters financing the private equity buyout of Singapore's United Test & Assembly Center are offering Asia's first covenant-lite loans to investors at a discount of up to 5% to push the risky package through the turgid leveraged finance market.

ABN Amro, JP Morgan and Merrill Lynch started marketing the $625m (€432m) of so-called "covenant-lite" loans yesterday at between 95 cents and 96 cents to par value, a steep discount that could lead them to incur losses of close to $30m between them.