July 2005
Securitization: Sovereigns window-dress national finances
Germany's deal shows how corporate techniques are firming up government balance sheets
A spate of sovereign ABS deals suggests that European governments are handling their balance sheets in a manner more associated with corporates as they struggle to stay within European Union borrowing limits.
The highest-profile recent deal came last month from Germany, a €8 billion, three-tranche securitization of future pension contributions from its privatized post and telecoms companies. Arguably this is not an ABS deal at all, but a series of cashflow sales.
The seller is Bundes-Pensions-Service für Post und Telekommunikation eV (BPS-BT) which collects contributions from Deutsche Telekom, Deutsche Post, and Deutsche Postbank and makes pension and medical assistance payments to their retired employees. Special legislation compels the state...
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