Italy's first public securitization of non-performing loans and the first transaction to make use of the new Italian securitization law hit the markets recently. The deal, arranged by Paribas and Finanzaria Internazionale for Banca di Roma and called Trevi Finance, is expected to be the first in a series of non-performing loan transactions as Italian banks take advantage of the new law and the power of securitization to clean up their balance sheets.
The deal is worth a total of E1.412 billion ($1.44 billion), though only the top two, single-A rated tranches, together worth E775 million were publicly offered. Of the deal's other three tranches C1, C2 and D Banca di Roma aims to sell the C1 and C2 pieces, each worth E206.5 million, with its own guarantee and a liquidity provision. The first loss D chunk, worth E224 million, will be retained.