Spain's Ahorro y Titulizacion said it is working on a €22.9 billion ($29.7 billion) securitization for the Instituto de Credito Oficial, a Spanish government agency that lends to businesses, according to a Reuters report.

The deal will be retained by the issuer and is backed by loans to companies.

News of the deal comes as the Spanish banking sector faces increased scrutiny over the failure of five of it regional banks, or Cajas, to pass the European Union's banking stress test on Friday (See related article via this link).

Additionally, aside from Instituto de Credito Oficial's potential transaction, other Spanish deals have come to the securitization market in recent weeks.

For instance, Earlier this month, Santander came to market with an auto loan ABS. Moody's Investors Service assigned ratings to deal, dubbed FTA Santander Consumer Spain Auto 2010-1.

The rating agency rated its €493.5 million ($620.5 million) A notes 'Aaa', which priced at 70 basis points over the three-month Euribor.

The €57 million B notes, rated 'Aa2', priced at 120 basis points over the three-month Euribor. The €49.5 million C notes, rated 'Baa2', priced at 150 basis points over the three-month Euribor. The transaction's €88.5 million D notes were rated 'Ca.'

To see story about this Santander deal, please click this link.



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