Germany's True Sale International (TSI) venture kicked off 2006 securitizing a batch of corporate loans, adding to the consumer loan deals completed in that asset class last year.
Since its inception in 2004, TSI has already seen two consumer loan deals via the two driver transactions from Volkswagen. The new 3 billion ($3.6 billion) deal is the first time this true-sale platform will be used to securitize corporate loans. Dresdner Bank, a shareholder and founding member of TSI, will sell loans from its domestic SME lending business to the German SPV, RCL Securitization.
The loans represent about 5% of the bank's roughly 60 billion ($72.5 billion) in corporate lending, said a source familiar with the deal. RCL will refinance the sale of receivables by issuing senior and junior notes, first-ranking and subordinated securities. The placement of the senior notes is slated for spring of this year. According to market reports, the deal will free up capital for Dresdner, which has been securitizing its loan receivables since 1998.
"We expect to see more deals this year," said TSI co-head Hartmut Bechtold. "The legal environment in Germany will improve further - the implementation regulation for the new refinancing register law is due to be enacted in Spring this year - providing a legal framework for private registration that will entitle the purchaser (SPV) to segregate registered claims in an insolvency of the seller, irrespective of whether the legal title of the claims has been transferred to the SPV or not. And the new government has stressed its support for the ABS market."
Bechtold added that the new deal would further boost Germany's status as an ABS destination partly because it sets the stage for the securitization of corporate loans.
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