Last year saw Germany's True Sale International finally bring to stage the much-awaited launch of the inaugural funded German true-sale via this German based SPV. The collective group of German entities to back the TSI (see ASR 10/18/04) had finally tackled the legal environment that in the past saw true-sale structures taxed in Germany and baptized its true-sale platform with Volkswagen Bank's Driver One GmBh, a 1.2 billion ($1.58 billion) auto loan securitization.

Volkswagen Bank, a veteran to true-sale issuing via its non-German domiciled SPVs, already benefited from its past series of securitizations but sources at the bank said the new German domiciled SPV offered improved spreads and access to a wider investor base. The deal priced in the single digits over benchmarks and increased by 157 million prior to pricing.

The purpose behind setting up the TSI platform was to set benchmark criteria for investor transparency - Driver One, for example, has a team dubbed ABS operations responsible for investor relations, transparency and data quality. "In the past, true-sale structures were issued with offshore SPVs - this German domiciled SPV simplifies communication," said one market source. "Investors have a chance to compare transactions across the TSI platform, more than they would if they looked at deals on an individual basis - the TSI licensing requirements allow there reports to be published on their website."

After the success of Driver One, Volkswagen pledged to issue via TSI again and the platform is open for other issuers to tap into the platform as well. "Issuers can set up an SPV in Germany on their own, but its more costly than using the infrastructure that is already in place," said one market source. "At the moment there is a lot of liquidity and banks have no problem getting funding, but this will change and we expect the program will prove it was worth establishing the infrastructure."

Sources at TSI estimated that 5 billion to 10 billion could be expected out of Germany in 2005.

Copyright 2005 Thomson Media Inc. All Rights Reserved.

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