The Italian securitization market is truly taking off as the country's banks realize that with the new securitization law in place there is no better way to clean-up balance sheets and release capital, while at the same time raising useful finance.

Banca Intesa in Milan is the latest to acknowledge that it is working on securitization transactions one deal backed by non-performing mortgages and another by healthy mortgages, according to Camilla Tinari, the person responsible for coordinating the bank's securitization efforts.

Tinari said that the non-performing mortgage deal which will be one of the country's first RMBS transactions will be backed by loans with a face value of Lit3 trillion ($1.6 billion), though she declined to speculate how much the mortgages are worth in reality. That is thought to be something that will be established by Deutsche Bank, which has been hired to advise on the transaction, though not mandated as deal arranger or underwriter.

Intesa hopes to launch the transaction by the end of the year after which it will turn to its healthy mortgages. It has hired Credit Agricole Indosuez to advise on the feasibility of a revolving MBS program, possibly with issuance in chunks of around Lit1 trillion. Securities house Caboto is also advising.

Intesa joins a long list of Italian banks that look set to take advantage of the new law by securitizing non-performing assets. Banca di Roma is working with Paribas to parcel loans with a face value of Lit3 trillion, while JP Morgan is conducting a due diligence of Fonspa's non-performing assets with a view to a securitization. The new law allows banks to account for the losses resulting from a NPL securitization over a five-year period, rather than taking the hit in one go, though the concession is only offered for the next two years. MD

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