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| Reich: initiative is “vital for improving conditions for SMEs in Germany and stopping the credit crunch” |
Will Germany finally start to generate true-sale securitizations next year, with all that means for the German economy?
"To be the biggest economy in Europe and not participating in the fastest-growing asset class is not logical," says a London-based asset-backed securities specialist. "Germany has been dominated by synthetic deals, and they are hard to sell. You need true-sale deals to achieve critical mass, and it's inevitable they will happen."
But German true-sale deals have been a long time coming. In July, German development bank KfW and 12 other banks signed a letter of intent to set up a special purpose vehicle to promote their True Sale Initiative (TSI). The banks would then pool loan portfolios and sell them into the capital markets through the SPV. At a press conference in London, Hans W Reich, the chairman of KfW's board of managing directors, described the TSI as "vital for improving conditions for SMEs in Germany and stopping the credit crunch".
By late November, no deals had been done under the TSI, and prospects for one by the year-end were slim.