Courtesy of Asset Sales Report International

Eurotunnel, the company that operates the Channel Tunnel, recently took its first steps towards a possible securitization of its distressed junior bank debt. The company mandated Merrill Lynch and Dresdner Kleinwort Benson to tender existing holders of junior debt advances at market prices. The two banks will also arrange any bond issue that takes place.

Finland - Valtion Asuntorahasto, otherwise known as the Housing Fund of Finland, recently returned to a relatively quiet European market with the fifth and biggest-yet deal from its Fennica vehicle. The EURO800 million ($680.2 million) transaction is backed by a portfolio of loans for borrowers to construct accommodation for families that qualify for social housing.

Italy - Banco Agricola Mantovana (BAM) recently brought to market the largest collateralised bond obligation (CBO) to come out of Europe. Called Gonzaga Finance, the EURO748.6 million ($642.9 million) deal securitizes a portfolio of over 80 bonds and credit default swaps and is the first public-funded CBO to be launched under the Italian Securitization Law. BNP Paribas and Finanziaria Internazionale were brought in to arrange the transaction for which Paribas also acted as bookrunner.

Ireland - Mortgage lender First Active returned to the market recently, with the third issue from the First Flexible vehicle. The GBP500 million ($721.9 million) transaction securitizes a portfolio of flexible mortgages originated by the company. Flexible mortgages allow borrowers to redraw amounts on the loan that have been paid in excess of scheduled payments. J.P. Morgan, as with the first two First Flexible deals, acted as lead manager, with Barclays Capital, Nomura and Merrill Lynch brought in as lead manager for the triple-A rated notes.

Ireland - Bristol & West, a wholly owned subsidiary of the Bank of Ireland, recently saw its first residential mortgage-backed securitization delayed by the U.K. regulatory body, the Financial Services Authority. The GBP300 million ($433.9 million) transaction, called Shipshape Residential Mortgages No.1, had been due at the start of October but following the delay was set to price at press time. ING Barings was brought in as lead manager.

Brazil - For quite some time, it's been a whole lot of talk and no action when it comes to securitization in Brazil. However, for the first time ever, Brazil will endure a true mortgage-backed securities deal, paving the way for a secondary mortgage market in the country. Brazilian Mortgages, a newly created mortgage entity, will structure a financial program aimed to develop the low and medium-income residential segments and the secondary mortgage market in Brazil through Brazilian Securities, a special purpose vehicle.

U.K. - In spite of a relatively quiet start to October in the European market, the work going on behind the scenes has created an expanding pipeline of deals that suggest the next few months will be busy for ABS professionals. One deal expected to launch soon is the securitization of income earned from a portfolio of theatres owned by Andrew Lloyd Webber's Really Useful Theatre Group. Called, unsurprisingly, Really Useful Theatres Limited, the GBP84 million ($121.9 million) transaction will be backed by the revenues of 13 theatres, including the London Palladium. Schroder Salomon Smith Barney and Chase Manhattan International will act as joint lead managers.

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