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Kensington Mortgage Co this week became the first UK non-conforming lender to securitise its assets in a foreign currency. Lead manager WestLB sold the senior tranche of Kensington's seventh mortgage securitisation entirely in euros, accessing new investors at an attractive cost of funds. "WestLB suggested a euro deal to us about a month ago, as a way to reach a different group of investors from our normal buyers in the sterling market," said Martin Finegold, chief executive of Kensington in London. "It was a nice idea and it worked. We are very satisfied with the pricing, which is similar after the swap to what a sterling deal would have cost us."

Komercní Banka of the Czech Republic announced this week that it had mandated ING Barings to advise on restructuring its Eu2.3bn non-performing loan portfolio. Securitisation is high on the list of potential solutions. The mandate is an explicit attempt to clean up the bank's balance sheet as an aid to privatisation - the government intends to sell much of the 49% stake it still holds in Komercní by the middle of next year.

The Italian treasury is expected to announce a timetable next week for the auction to appoint lead managers for its Eu4.1bn securitisation of delinquent social security contributions. In April the government appointed Banca IMI, Morgan Stanley Dean Witter and Warburg Dillon Read to structure the transaction, but the underwriting mandate will be offered separately.

Greenwich NatWest this week announced the launch of a Eu1.29bn securitisation of non-performing mortgages for Istituto Italiano di Credito Fondiario, the largest Italian securitisation so far. NatWest stated that Eu826m of senior and mezzanine notes and a Eu464m junior piece "were privately placed by and among a number of Italian banks." Italfondiario will use proceeds to refinance bonds issued at high coupons before the steep falls in Italian interest rates of the last few years.

Derivative exposures currently are calculated by marking the transaction to market, applying an "add-on" to reflect the outstanding duration of the derivative and the riskiness of the underlying asset, applying the credit risk weighting of the counterparty and then reducing this total by 50%.

The performance of Germany's states in the international markets has been patchy, to put it mildly. Although some individual states have won plaudits for their strategies and attitudes, the pooling of the debt of several other states has not been popular.

On the surface, the Pfandbrief market is in buoyant health. The campaign to internationalise the product appears to have succeeded brilliantly. More and more debt is being sold to overseas investors and issue sizes are growing all the time.

Securitisation in Germany is starting to develop fast as banks increasingly focus on return on equity and as companies consider new financing strategies as a way of boosting shareholder value.

Germany's capital market and its participants have embraced the euro with gusto, adding new momentum to a financial market which has changed out of all recognition in the last few years.

Big, medium or small, Germany's companies are making increased use of the bond markets as the euro opens up a new world of investors and funding opportunities. From the jumbo bonds issued by Mannesmann to the small debuts by a handful of Mittelstand companies, the trend is clear and investment banks are engaged in a major marketing drive to persuade new corporate issuers to venture into the market.