Portugal is getting the hang of things these days - at least that seems to be the market opinion. A report last week from Moody's Investors Service predicted that 2002 will be filled with asset-backed transactions and CDO deals from repeat issuers as well as some possible new entrants. New players in the residential-mortgage arena are also expected, though forecasts are uncertain as a result of the evolving market.

Last year, Portugal saw two repeat issuers in the market, along with a CDO transaction and the first mortgage-backed securitization in the country's history. Banco Comercial Portugues' EURO1 billion, Magellan Mortgages No.1, brought to market via ABN AMRO (see ASR 12/17/01 p.15) opened the floodgates for more transactions of the like to come to market in 2002. It was the first transaction to implement the new securitization law that was originally passed in 1999.

While the new law has lifted the previous legal problems associated with RMBS transactions, according to the report issued by Moody's, the relatively high administrative and regulatory burden and costs associated with setting up an FTC or Sociedade de Titularisaco may still hinder the number of users of Portuguese SPVs going forward. However, these costs could be potentially offset through multi-issuance, which may rouse the possibility of long-term growth of Portuguese SPVs in the near term.

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