| Fondo Immobili Publici Source: Transaction documents |
The Italian government has established a track record of innovation in the capital markets and its latest off-balance-sheet funding exercise was highly notable, not just because of its €3.3 billion size or the government buildings and offices that underlay it. "This was an opportunity for both efficient financing terms from the Italian state and to help develop the closed property fund market," says Yossi Kraemer, head of ABS syndicate at RBS.
At the end of December 2004, Banca IMI, Barclays Capital, Lehman Brothers, RBS and Cassa Depositi e Prestiti (the Italian treasury's bank) disbursed a €2 billion bridge loan to finance the sale of a ministry of economy and finance commercial portfolio of 396 properties. At €3.3 billion, the portfolio was discounted by 10% to take account of its being a block sale.
The arrangers established a fund, Fondo Immobili Publici (FIP), run by experienced operators, with the aim of increasing the value of the portfolio and making a return for its unit holders. FIP Funding was essentially a €2 billion sale-and-leaseback CMBS and a €1.3