With the German economy teetering on a technical recession, investors are beginning to take a more thorough look at the type of loans to be included in true sale structures going forward. There may be more than meets the eye, and in the long term, sources say, the German cash initiative may turn out to be more than just a funding opportunity.

"Investors will no doubt see the German market as a valuable diversification tool, but should keep in mind the motivation behind future cash deals," said one market source. Under the true sale initiative (see ASR 4/28), government-owned promotional bank Kreditanstalt fur Wiederaufbau (KfW) will assume the moderator role. KfW is not, however, expected to lend any explicit guarantee to transactions.

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