Italy's largest industrial company, Fiat, and its third largest bank, UniCredito Italiano, have formed a securitization advisory joint venture with the intention of taking advantage of the country's potentially lucrative securitization market and winning business elsewhere in Europe, according to a UniCredito official.
The joint venture, called Euro Capital Structures, will act as a deal arranger and structurer. It has been established in Dublin's International Finance Centre and is staffed by five experienced securitization professionals. Pending final approvals from the Irish authorities, the office should officially open for business in August.
The first deals, expected to reach the market before the end of this year, will be backed by assets originated by the two partners - auto loans in Fiat's case and assets such as loans or mortgages for UniCredito - but the intention is also to sell its services to other Italian issuers and those further afield.
"We set up in Dublin, not just for fiscal reasons, but because we want to convey to the Italian financial system that we are present in this type of business, while also conveying that to people in Europe as a whole," the official said. UniCredito already runs its mutual fund activities from Dublin.
The news comes at a time when there is great excitement about securitization in Italy, after legislation recently established a precise framework for asset-backed and mortgage-backed deals.
Several Italian banks are planning to take advantage of the new law to securitize non-performing loans, but the official stressed that there was much more to securitization than just bad loan deals. "The new law was presented to the market here as a remedy for bad loans, but that is not our idea for securitization and that is not our approach. We believe that it is a new instrument for loans and cashflows in good shape."
Fiat was one of Italy's first asset-backed issuers and has regularly visited the market. - MD