S&P Expects Portuguese ABS Market to Grow 20 in 2003.

Business Editors

LISBON--(BUSINESS WIRE)--Standard & Poor's

Feb. 19, 2003--The Portuguese securitization market is set to grow by 20% in the year ahead, Jose Ramon Tora, director at Standard & Poor's European Structured Finance Ratings group in Madrid, said today.

Speaking at a Lisbon conference co-hosted by Standard & Poor's and Deutsche Bank AG, Mr. Tora said that growth expectations are bullish despite the slight dip in volumes witnessed over the course of 2002.

"Last year's volumes were fractionally lower than those of 2001 which is attributed to the absence of any CDO activity and a tendency toward smaller scale issuance," he explained. "However, it must be borne in mind that despite the smaller deal size, transactions were more abundant, clear evidence of the market's increased comfort with securitization."

The 2003 pipeline should redress the year-on-year fall in volumes: 2002 volumes came in at EUR3.3 billion compared with EUR3.7 billion in 2001. A total of 10 transactions closed compared with seven the year before, which halves the average transaction size to EUR300 million versus EUR600 million in 2001.

Mr. Tora added that he expects growth in the year ahead to be driven by a combination of repeat issuance and the emergence of new several market players, a continuation of a theme that emerged strongly in 2002.

"In 2002, for example, we saw several established originators, such as Banco Comercial Portugues S.A. and Banco Espirito Santo S.A., re-tap the market, which demonstrates that the market is maturing," he said. "Also, Banco Nacional de Credito Imobiliario and Montepio Geral made their first forays into the securitization market, providing another positive growth signal."

Among new entrants in 2003, Mr. Tora expects to see some securitization activity generated from the Portuguese corporate sector for both balance-sheet management purposes and to raise potentially cheaper financing.

"While financial institutions will account for the large share of Portuguese market issuance in the year ahead we are still expecting some activity from the corporate sector," he said. "Several transactions are already mooted for this year."

In the asset class league tables Mr. Tora expects ABS transactions backed by consumer finance receivables to retain the premier spot in the year ahead. However, he added that the RMBS ranking will climb significantly higher.

"Unlike other securitization markets, the RMBS asset class has taken somewhat of a backseat to consumer finance ABS transactions," he said. "However, despite the slow start to RMBS issuance we are expecting strong growth as many Portuguese banks have considerable, readily securitizable mortgage portfolios on their balance sheets."

Atlantes Mortgage No. 1 PLC, the first Portuguese RMBS transaction of 2003, has already closed. The EUR500 million securitization was originated by BANIF Banco International do Funchal S.A. and was backed by a pool of first-ranking, fully amortizing mortgage loans secured on residential properties located in Portugal, which were originated between August 1995 and December 2002.

The conference focused on several key themes, including developments in the Portuguese market, the benefits of securitization to Portuguese banks and corporates, and an overview of investment analysis of ABS and MBS. A total of 120 market participants attended.

A related criteria article, entitled "Criteria for Rating Portuguese Residential Mortgage-Backed Securities" and published Aug. 6, 2002, is available on RatingsDirect, Standard & Poor's Web-based credit analysis system. The commentary can also be found on Standard & Poor's Web site at www.standardandpoors.com. Click Fixed Income and find the article under Credit Ratings Criteria. Members of the media may contact Mr. Tora through the Press Office hotline in London on (44) 20-7826-3605.

ANALYST E-MAIL ADDRESSES

[e-mail]

[e-mail]

Copyright 2003, Standard & Poor's Ratings Services