The Bipop-Carire Group returned to the performing mortgage sector last week, with the largest Italian RMBS issue to date. Via Dresdner KW, the EUR766.5m issue will only be able to claim this title for a few weeks, as BPM is set to trump it with its upcoming EUR1.34b offering.

The soft bullet structure differentiates Garda from other Italian MBS transactions. The pick-up, servicer recognition and origination areas were also positive factors. Prepayment speeds in Italy are slow, and this structure will focus on re-investment during the seven-year revolving period, saving on a technical update at each stage of amortization.

This suits bank investors that bought the deal, and given mortgage origination by the Bipop-Carire group is expected to continue its uniform nature it was possible to push the revolving period out to seven years. A EUR670m triple-A piece at 29 basis points offered a pick-up over comparable Dutch and Spanish deals. Both that and a EUR30m single-A class (at 72 basis points) were publicly offered. The issuer retained a EUR66.5m piece. Bipop-Carire's last deal, through the Upgrade vehicle, priced the triple-A at plus 27bp for and the single-A at plus 70bp (both were five-years).

Dresdner managed to sell Garda's single-A at the tight end of talk at plus 72bp, and even reported having inquiries at plus 70bp, citing continued demand for lower-rated RMBS paper. At the end of the revolving period both coupons step up by 100bp. Over 35 bank investors across Austria, Germany, the Benelux region, France, Spain, U.K. and Dublin-based banks bought the senior tranche.

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