Westdeutsche Landesbank (WestLB) recently launched a E192 million ($200 million) worker remittance, future-flow securitization for Halkbank, one of Turkey's largest state-owned banks. The deal is backed by present and future payments including remittances, bank checks and export payment orders deposited into 16 of Halkbank's correspondent offices in Europe and North America but it is not a normal asset-backed bond, issued via the capital markets. Instead, WestLB has structured the deal as a securitized syndicated loan.

"On the asset side, we've done everything we would normally do on an asset-backed deal but this uses a syndicated loan rather than a bond," said David McCaig, a director in WestLB's asset-backed team. "We felt that a syndicated loan would provide the optimal funding source given the current weakness in the capital markets for emerging markets."

WestLB is currently syndicating the loan, a process that will trade on Halkbank's importance to the Turkish economy and on the origin of the receivables in the world's strongest economies. "It has a very strong offshore source of payments, which mitigates the convertibility and transfer risks, and also means that most banks won't have to allocate 100% country limits against the deal, which makes it very attractive," McCaig added.

Halkbank said that it will use the proceeds to increase lending to its core market of small and medium-sized businesses.

Autoloans, mortgages

Other transactions to hit the European market recently included a GBP400 million ($635 million) auto loan-backed transaction from Great Universal Stores (GUS), arranged by Merrill Lynch, via an SPV called Automobile Receivables Transactions No. 1.

The bonds, split into a triple-A rated senior tranche worth GBP380 million and a retained A2 rated subordinated piece worth GBP20 million, are backed by 80,000 auto loans. A Merrill Lynch official suggested that the pricing 29 basis points over three-month Libor for the senior tranche was slightly tighter than comparable transactions, such as Chartered Trust's Cars 4 deal, because of the greater strength of the underlying portfolio.

The deal is the latest step in GUS's efforts to refinance its GBP1.67 billion purchase of Argos, another catalogue-based retailer.

Meanwhile, Irish bank First Active, a regular MBS issuer, came to market with its third securitization of Irish mortgages, in a E250 million ($259 million) deal called Celtic Residential Irish Mortgage Securitisation No. 3. The bank's U.K. subsidiary Mortgage Trust has also closed several mortgage-backed transactions.

The deal was First Active's first deal denominated in euros, which allowed lead-manager Paribas to place the deal much more widely than was possible in the past. Roadshows were held in Paris, Dublin, London and the Benelux countries, and investors were attracted by and willing to pay for the diversity that a portfolio of Irish mortgages offered.

Italian leases

Paribas was also busy in Italy this month, jointly arranging a transaction with Finanziaria Internazionale, for Italy's keenest securitizer, Banca Italease. The deal, Italease's fourth, was worth E232 million and was called Iris No. 4.

It was most notable because the triple-A rated E206.5 million senior tranche was funded by the European Investment Bank (EIB), the first time the EIB has been involved in the Italian securitization market and only the second time it has taken part in any asset-backed deal. The EIB provided a limited-recourse loan of E206.5 million, which will be paid off by cash flows arising from the underlying performing, vehicle and equipment leases.

Credit enhancement comes from retained "B" and "C" tranches, worth E21 million and E4 million respectively.

- MD

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