The recently announced Lonestar German nonperforming loan (NPL) securitization deal may bring to mind predictions made roughly two years ago about the German NPL securitization market booming. However, market sources said that the sector's inaugural deal is likely to be a one-off, at least in the near term.

Lonestar's 1.34 billion ($1.78 billion) Bluebonnet Finance plc is backed by a mixture of nonperforming (50%), subperforming (26%) and performing (24%) loans acquired by the private equity firm Lonestar, which has been very active in the German NPL sector in recent years. It is the first transaction of its kind for Germany and the largest NPL issued in Europe to date.

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