Moody's Investors Service recently confirmed its Aaa rating for all three tranches on the Italian state social security body's EURO4.65 billion securitization of social security assets.

However, Moody's said that it had serious concerns that "certain negative developments might result in pressure on the existing ratings" of the deal from Istituto Nazionale della Previdenza Sociale (INPS) - and yet again the troubled deal has become the subject of unwelcome speculation in the European market.

November should be a busy month in the European market as companies and banks try to get deals out there before the Christmas break. One of the deals expected in the early part of the month is the housing association of Gothenburg's EURO300 million ($255.2 million) second deal. Skandinaviska Enskilda Banken was brought in to act as lead manager.

Called Framtiden Housing Finance No.2, the transaction is backed by the rental income from over 10,400 loans from 178 apartment blocks in the city. Both Standard & Poor's and Fitch IBCA gave a provisional triple-A rating to the single tranche deal.

Dutch life insurer DBV Levensverzekeringsmaatschappij recently made its first entry into the European market with a EURO349.5 million ($288.8 million) mortgage-backed deal. Called Holland Homes MBS 2000-1, the transaction securitizes a portfolio of first and second tier residential mortgage loans originated by DBV. Fortis Bank was brought in to arrange the deal and also acted as lead manager alongside Morgan Stanley Dean Witter.

Germany's Deutsche Genossen-schafts Hypothekenbank (DG Bank) came to market recently with an EURO1 billion ($830 million) mortgage-backed deal. The transaction, called Bauhaus Securities Limited, securitizes over 53,000 loans from DG bank's own portfolio, and the notes are secured by public sector Pfandbriefe issued by the bank. DG arranged the deal and also acted as lead manager.

Sweden's Sveriges Bostadsfinansier-ingsaktiebolag (SBAB) last week launched its EURO1 billion securitization of first-tier residential mortgages. The transaction was interesting because as well as three Euro-denominated tranches, SBAB also widened the distribution by offering a small fixed-rate Yen piece. Nomura acted as lead manager on the transaction, with Merrill Lynch and Salomon Smith Barney brought in as co-leads.

Latin America

In a seemingly new phenomenon, the International Finance Corp. has begun to reorganize the primary mortgage market in several countries which sources say will have an array of benefits, including a more liquid secondary market. First Argentina, then Korea, and now Colombia - and the IFC says we haven't seen the last of it. What's next? Rumor has it may be Mexico or Brazil.

In a deal expected to close this month, the Argentine Province of Salta will make history by piercing the sovereign ceiling with the first-ever royalty-backed deal. Lehman Brothers will structure the $250 million deal, in which the Province of Salta will securitize its oil and gas royalties. One of the rating agencies has said the deal will receive investment-grade ratings as a result of certain features of the transaction, one of which is the inclusion of political risk insurance.

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