At press time Fortis was in the marketing phase for its CARE 2001-I B.V transaction, with Bear Stearns acting as joint-lead managers.

This represents the first synthetic transaction of healthcare loans for the company. The portoflio totalled 1.3 billion of a revolving reference portfolio originated by Fortis Bank N.V./S.A. and its affiliates.

The SPV Dutch Care entered into a Credit Default Swap agreement (CDS) to sell protection to Fortis Bank, on a reference portfolio of exposures to Dutch healthcare institutions. At the closing date the reference portfolio consists of 571 reference obligations; these all represent healthcare institutions falling under the Dutch legal and regulatory public healthcare framework. Fitch estimated the average rating of this portfolio to be A+.

Rather than the more CMBS-type deals seen in the nursing home sector in the U.K., this transaction is more akin to a CLO. The institutions that make the portfolio include: hospitals; nursing homes; residential care homes; as well as psychiatric hospitals.

The transaction also includes an issue of 237.5 million notes includes three tranches composed of: a 140 million Class A floating-rating notes due 2040 rated triple-A, a 65 million Class B floating-rating notes due 2040 rated single-A and a 32.5 million Class C floating-rating notes due 2040 rated double-B.

The class A notes are backed by OLO bonds (rated AA) issued by the Kingdom of Belgium that are subject to a repurchase agreement (repo) with Fortis. The class B and C notes are backed by cash deposits held in a blocked account with Fortis.

An official at one of the lead-managers commented that Fortis had entered into this securitization because it wanted to maximize economic value and manage regulatory capital as well as free up its credit lines to these lenders.

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