Milano, 10 September 2003
Banca Intesa launched a new synthetic securitisation for a nominal amount of 441 million euro, named “Bramante”. With this operation Banca Intesa buys protection on the entire amount of a single real estate loan of 441 million euro through credit derivatives. Banca Intesa buys protection on a 214 million euro tranche from Bramante Plc -a Special Purpose Entity which securitises this amount by issuing notes to be sold to institutional investors - and on the remaining tranche of 227 million euro from a leading financial institution.
“Bramante” is the fourth public synthetic securitisation on the Bank’s balance sheet launched by Banca Intesa, after Scala 1 in Novembre 1999, Leonardo in May 2001 and Verdi in December 2002, and is the first public synthetic securitisation launched in Europe concerning Commercial Mortgage Backed Securities (CMBS) of a single real estate loan.
The securitised loan is the senior tranche - currently amounting to 441 million euro - of the financial package structured by Banca Intesa in July 2002 to back the acquisition of Telemaco Immobiliare by Whitehall (a real estate fund managed by Goldman Sachs). The establishment of the real estate company Telemaco Immobiliare - previously owned by Beni Stabili, Telecom Italia and Lehman Brothers - was due to Telecom Italia’s spin-off aimed at putting together some assets to be sold.
This operation strengthens the leading role of Banca Intesa as Arranger of structured loans to the real estate sector by granting flexibility in terms of distribution channels through a wide access to international markets, in the frame of an efficient balance-sheet management.
Synthetic securitisations are third-generation securitisation structures which, through the use of credit derivatives, do not imply the physical transfer of the underlying portfolio, but transfer only the credit risk thus maintaining the bank-customer relationship, and liberating economic/regulatory capital and expanding operating margins.
In detail, with this operation Banca Intesa buys protection on the entire amount of the real estate loan of 441 million euro, through two credit default swaps:
- the first credit default swap with Bramante Plc, Special Purpose Entity (“SPE”) domiciled in Ireland, covers the first loss on the portfolio up to a maximum of 214 million euro (48.6% of the total loss);
- the second credit default swap with a leading financial institution covers the remaining part of the risk (Super Senior Tranche) of 227 million euro.
In turn, Bramante securitises the credit risk taken by issuing notes for a total value of approximately 214 million euro. The notes issued by the vehicle are sold to institutional investors based on the following tranches:
- Class A Notes (AAA/AAA): 30 million euro (6.795% of the total amount) with a return of Euribor + 40 basis points p.a.
- Class B Notes (AA/AA-): 54.1 million euro (12.254% of the total amount) with a return of Euribor + 65 basis points p.a.
- Class C Notes (A/A-): 46.4 million euro (10.51% of the total amount) with a return of Euribor + 95 basis points p.a.
- Class D Notes (BBB/BBB): 68.4 million euro (15.493% of the total amount) with a return of Euribor + 220 basis points p.a.
- Class E Notes (BB/BB): 15.5 million euro (3.511% of the total amount) with a return of Euribor + 570 basis points p.a.
Banca Intesa acted as Originator and Sole Arranger.
Morgan Stanley was Sole Bookrunner and Co-Lead Manager.
Caboto was Co-Lead Manager.
Last updated 10 September 2003 at 15:00