The shortlist to advise on and structure an ABS backed by delinquent social security assets for the Greek government agency, IKA, has been drawn up.
The size of any deal is unclear with some bankers suggesting that it could be worth around e2 billion ($1.97 billion). The banks have until the end of February to finalize their proposals and a decision will be made in June or July.
IKA's president Miltiades Nektarios said that the deal should be launched in the summer, but bankers expressed skepticism that it would be completed so quickly and suggested that it would finally surface nearer the end of the year.
A draft securitization law is currently before parliament, though it may be changed in order to allow for the deal.
"The climate for securitization is not very favorable at the moment, but one advantage of working on deals for government entities is that you have a chance of getting the law amended in ways that will make any deal as efficient as it can be," said one London-based expert, who is helping to prepare one of the consortia's proposals.
"The problems with this will not only be the structuring but getting clarity about the assets that will back the deal. Like the INPS deal in Italy, this is going to be complicated and will require a lot of analysis and due diligence."
Banks on the short-list (made up of around six consortia) are rumored to include Commercial Bank of Greece, J.P. Morgan, Paribas, Citibank, National Bank of Greece, Morgan Stanley Dean Witter, ABN Amro, Agricultural Bank of Greece, Sanwa International, Bank of America, EFS Eurobank and Deutsche Bank. Clifford Chance, KPMG, Deloitte & Touche and Ernst & Young are also thought to be have joined in consortia with the investment banks.
The deal will open the Greek securitization market with a bang, as the country is one of the few places in Europe that has yet to see ABS take off. It follows on from a deal backed by similar assets from INPS, the Italian state social security body.
One banker suggested that while there will eventually be deals from other municipal bodies and corporates the country is unlikely to become a hotbed of securitization.
