An Italian law decree could have, at least temporarily, a negative impact on CMBS activity in the country, according to Standard & Poor's. The rating agency said last week that the fourth of July Law Decree N. 223, which was published in the Italian Official Gazette earlier this month, could affect Italian structured finance transactions which have "considerable" exposure to commercial real estate properties. It would essentially change the way tax is charged on real estate in Italy, and it has many investors up-in-arms, according to news reports.

While the law decree can be modified significantly prior to its actual conversion into law, the decree holds during the 60-day process taken to do so. Because of the changes applicable on trades involving commercial real estate assets, the cost of doing transactions could increase. This would negatively affect supply-and-demand dynamics, according to S&P.

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