Cassa Depositi e Prestiti, an Italian bank with €55 billion in loans to local authorities, is planning to come to market with the first Italian covered bond in October, later than originally anticipated, said Andreana Esposito, head of the covered bond program at CDP in Rome. She said a delay in the structuring process has pushed back the sale, which was expected to occur last month. Also contributing to the delay are hurdles in procuring documentation, according to an official at Lehman Brothers, one of the three investment banks mandated by CDP in May.
CDP, a public postbank that is 70% owned by the Italian treasury, mandated ABN AMRO, Deutsche Bank and Lehman on the first covered bond deal out of Italy. The total program is for €20 billion, with the inaugural benchmark issue in the region of €3 billion.
The CDP deal does not yet pave the way for the private sector to issue covered bonds, as Italian legislation governing securitization has yet to be amended to include covered bonds. CDP circumvents this legislation through a special government decree, which provided for segregation of assets on its balance sheet when it was legally transformed into a joint stock company at the end of last year. "The Ministry of Finance and Economics will give us an update on the securitization Law 130 in September, but it is likely to wait and see how the CDP covered bond goes before making any final changes," said Anna di Paolo, head of securitization at Monte dei Paschi di Siena, which plans to issue a covered bond once the legal framework is in place.
