Italian securitizations of non-performing loans are quietly popping back on to the radar screen as analysts predicted, following the boom of 2000 and 2001 when approximately E2 billion and E4.79 billion was issued, respectively.

Since the implementation of the Italian Securitization law in 1999, according to Moody's Investors Service, a total of E20.7 billion in NPL portfolios has been securitized. The rapid development of the market is largely attributed to the critical mass of NPLs on banks' balance sheets, and a favorable tax environment that allowed banks to amortize NPL-related losses over five years - considerably easing the immediate negative impact a securitization might have on financial results. With that benefit ending, some market sources are less bullish on their volume projections.

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