DG HYP, DZ Bank and KfW are launching the first multiseller transaction to securitize small commercial German mortgage loans. PROSCORE-VR 2005-1 will pool the risks from small commercial mortgage loans -- the maximum size is €2.5 million ($2.9 million) -- of different cooperative credit institutions. The structure is similar to the KfW sponsored PROVIDE platforms. Roughly 95% of the securitized reference claims are originated by DG HYP, the rest come from six other cooperative banks. For the securitization, KfW will initially assume the default risk of the underlying credit portfolios of DG HYP and the participating cooperative banks. Under the leadership of DZ BANK the risk will then be placed in the international capital and swap markets. Around €183 million will be securitized via credit-linked notes and the remaining risk of about €551 million is covered by a credit default swap.

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