The Greek government recently issued the third in a series of securitizations designed to gear itself up for single-currency conversion to the Euro, and market analysts predict that additional deals are being lined up, including a possible securitization of social security taxes.

As countries such as Greece and Italy seek to reduce their indebtedness in order to meet the European Union's standards for conversion to the Euro, they have frequently turned to securitization. Atlas Securitization S.A., a special purpose entity (SPE) designed by the Hellenic Republic, recently issued 2 billion in two floating-rate tranches, which both garnered a single-A rating from Standard & Poor's.

The underlying collateral, like prior deals, consists of amounts due from the European Commission under the third Community Support Framework (CSF III), which is responsible for funding eligible projects undertaken by Greece. The EC, through CSFIII, makes funds available on an ongoing basis to the Hellenic Republic from 2001 to 2006.

If Atlas does not have the required funds to meet its obligations, the Hellenic Republic steps in to cover the difference.

Its previous two securitizations have included Ariadne, a 650 million securitization of future state lottery receivables and Hellenic Securitisation S.A., a 445 million deal backed by future receipts from home loans to state employees.

While the country has made very few steps in terms of securing a thriving non-government platform for securitized vehicles it has certainly served as a forerunner of what to expect as countries throughout Europe grapple with adopting the Euro.

On its heels is Italy, who earlier this month chose Banca Nazionale del Lavore, Schroder Salomon Smith Barney and UBS Warburg as lead arrangers of it lotto-receivables securitization. Additionally, the Italian government is making an effort to securitize its sizeable real-estate portfolio. "In the coming months we should see a clutch of issues backed by state receivables that will differ in quality due to their different obligors," said an analyst at Dresdner Kleinwort Wasserstein.

For Greece, market analysts expect that a securitization of social security receivables may be lined up next. There have been talks of Italy issuing a similar transaction, which would count as its second attempt. In May the Italian government issued a second securitization in its INPS series, and a third in the series is expected before year-end.

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