11/04/2014 – Bloomberg
Spanish Government is weighting up converting a €7 billion in mortgages of Catalunya Banc, an entity that was nationalized and bailed-out in 2011, into asset-backed securities.
The step aims at waking greater demand for the debt. Adding bonds to the lot seems utterly possible. (…).
The credit portfolio transformation could decrease risk as the lowest-rated lots pay the best coupons. (…). The state warrant will apply to mezzanine part of the debt, while the junior debt will probably stay in hands of the entity.
(…) In the following days, experts from FROB (Spain´s banking-rescue fund) will explore the mortgage portfolio in search of all types of risks. Then, the potential buyers will analyze the lot and give their opinion that may influence the guarantee size.
Original article: Bloomberg (by S. Smith & E. Duarte)
Summary: AURA REE