Securitization: Lazio gets biggest ever revolving commitment
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Securitization: Lazio gets biggest ever revolving commitment

Investment banks Nomura and Mediobanca are about to close Italy’s largest ever securitization of regional healthcare receivables, according to market sources in Italy and London. “This is the largest ever deal of its type, and it has unique structural features that have never been used before in this asset class,” says a source close to the €2 billion transaction.

By John Ferry

The banks are believed to have jointly arranged a sophisticated investment structure that effectively gives Lazio, the region around and including Rome, a revolving credit facility that is also designed to give creditors security on future payments. Nomura and Mediobanca would not comment on the transaction but the source says investors are being asked to buy a type of three-year variable rate note – a partly paid note structure that will be sold with a commitment to payment but with unknown actual monthly payout amounts. “It’s a type of revolving commitment. You get a limit of how much you will lend or commit over time, and every month you will put in capital that will then be repaid according to a schedule. The total limit is known, but the monthly amounts are not known,” says the source.

Softer debt impact

The deal should enable Lazio’s administrators to manage more effectively their asset-liability mix. By restructuring short-term payouts to healthcare vendors to bring them more in line with the financial flows into its budget, the region should soften the impact of accumulating debt on instant cash needs.

This is not the first securitization of healthcare receivables – money owed by Italy’s regional health authorities to local healthcare providers – performed by Nomura for Lazio.

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