Soon-to-be-passed legislation in Italy will make it possible to execute whole business securitizations and, accordingly, investment banks are getting equipped to start structuring deals. Market experts expect the specially designed legislation to be enacted next year and are bullish on the prospect for deals. "Money costs more for Italian corporate bond issuers, because banks are less willing to lend," says Marco Grimaldi, a securitization banker at Dresdner Kleinwort Wasserstein in London. Grimaldi says "ring-fencing" operating assets with a steady cash flow and borrowing against them makes economic sense for Italian corporations.
Alexander Batchvarov, head of international securitization research at Merrill Lynch in London, expects whole business deals to take off in Italy once the legislation is passed. He notes many European and Italian corporates alike are studying the whole business deals executed in the U.K. with an eye to structuring their own. Grimaldi expects Italian corporates to refinance existing debt using whole business structures, similar to the proposed E1.3 billion securitization from Rome Airport via Barclays Capital.