Portugal has not been amongst the busiest securitizing nations in Europe, though it has gone from nothing to a regular deal flow over the last two years. Nonetheless, although the Portuguese government implemented a securitization law last November, bankers have been disappointed that the mortgage-backed securitization - in many countries the mainstay of issuance - has yet to get off the ground.

There are several reasons for this, including the fact that when a special purpose vehicle is established it is subject to withholding tax as is the case with normal companies. "As things stand, the law has been an impediment to deals," said Stuart Jennings, an analyst at Fitch. "One of the shortcomings of the law is that it didn't explain or clarify whether the Portuguese SPVs would be exempt from withholding tax. Until that is ironed out - and a lot of banks are waiting for clarification - I don't believe that structure will be used."

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