Morgan Stanley Dean Witter was set to bring to market yet another securitization of Italian non-performing loans as ASRI went to press - its fifth Italian NPL deal.

A pool of loans purchased by Morgan Stanley from the Italian finance company, San Paolo IMI, backs the latest E715 million ($671 million) transaction, called International Credit Recovery Five.

The underlying assets comprise around 16,000 loans, mainly residential mortgages, with a face value of just under E1.5 billion. Credit enhancement will be provided by subordination on the junior notes as well as any excess spread.

Despite the relatively high concentration of the loans in Southern Italy, Standard & Poor's was comfortable in its rating because the portfolio will be managed by two outside services with experience of the region: KGI Corso Venezia and Servizi Immobiliari.

The transaction is split into four floating rate tranches. The E515 million A tranche has been provisionally rated AAA by S&P; the E100 million B notes are rated AA; the E60 million C notes are rated A and S&P has given a BBB rating to the junior E40 million D tranche.

Another imminent Italian deal is Banca Centrale per il Leasing delle Branche Popolari's (Italease) fifth transaction. The E588.3 million deal is backed by a pool of around 5,700 lease contracts, with a value that matches that of the notes issued. UBS Warburg was brought in to act as underwriter on the transaction.

The deal, called Italease Finance, is split into three series of notes including an unrated E11.8 million tranche. S&P gave a AAA rating to the E550 million series 1 notes and rated the E26.5 million series 2 tranche at A.

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