Nova Finance No.3

12NOV2002 --- NOVA FINANCE NO 3 PLC ---
CLASS A: E284.8M, FRN, Aaa/AAA (MOODY'S/S&P), EAL 4.4YRS, 3ME+28BPS, FEES 15BPS
CLASS B: E11.2M, FRN, Aa2/AA, EAL 5.8YRS, 3ME+40BPS, FEES 20BPS
CLASS C: E8M, FRN, A2/A, EAL 5.8YRS, 3ME+73BPS, FEES 20BPS
CLASS D: E16M, FRN, Baa2/BBB, EAL 5.8YRS, 3ME+137.5BPS, FEES 50BPS
CLASS E: PRIVATELY PLACED
COMMON TERMS: LFM OCT-11; EALS ASSUME EXERCISE OF 10PC CLEAN-UP CALL; PAY 19-
NOV. REVOLVING PERIOD ENDS 15-OCT-05. LEADS BCP, BNPP.
                                --- DEAL INFO ---
    The Nova program for Portuguese bank lender Banco Comercial Portugues (BCP)
continues with the 'purest' form of Portuguese consumer debt in that there is no
corporate exposure or lending to Spanish entities in the mix, improving the
granularity of the pool. On the flip side, some of the mixed pools (eg Lusitano-
2) have included leases, which have a better standing in Portuguese law than
unsecured consumer loans.
    Nova-2 came this time last year, within 24 hours of LTR-3, whose follow-up
issue is due very shortly. Lead managers BNPP and Deutsche have swapped places
with the mandates, with Nova-2 coming from the Deutsche stable, in addition to
this years' other Portuguese offerings from BMORE (auto loans) and BANIF
(Madeira mixed loans). BNPP also brought Lusitano-2.

 Nova-2 and LTR-3 came at similar levels at the time, both paying +33bps at the
AAA level, though LTR was one year shorter, making up for a pool which had 18pc
Spanish exposure and some corporate leases/long-term rental agreements. Nova-3
is the first BCP deal to come under the provisions of the recent securitisation
law allowing the use of SPVs and avoiding the slightly messy process of
splitting interest and principal payments via different (Portuguese) vehicles.
    Although there are slight nuances in collateral between the deals over the
last year, Nova-3 has come at good levels for the borrower, with investors still
looking to diversify away from the high level of issuance in many of the other
abs markets. It comes 5bps inside last years deals for Nova and LTR at the AAA
level, and although had to pay more for its single-A tranche than originally
suggested (guidance was 60-65bps), still bested the previous results. That the
Italian Treasury's real estate transaction is about to dump a 1/2bn at this
rating level makes the wider pricing for the E8m sold here almost irrelevant. In
contrast, the AA piece priced at levels remarkably tight to the AAA bond, again
suggesting a shying away from the single-A area. The deal ended up 2x subscribed
by buyers from Benelux, Germany (1/4 each), France, Eire and Portugal (over
10pc). \\\ENDS\\\