With the holidays at an end it was back to business last week, and the market began gearing up for what promises to be a busy year-end European securitization market. According to Dresdner Kleinwort Wasserstein, 2002 securitization volumes reached E72.8 billion through 128 deals.

The primary pipeline pressed beyond CDOs with some structure diversification that includes Monte Dei Paschi di Siena Group's Italian consumer loan securitization. The E1.7 billion deal is expected to come to market in the coming weeks and will include five tranches. The triple-A rated class A1 and A2 tranches carry a weighted average life of 1.9 years and 5.3 years, respectively. The Class B tranche is rated double-A with a 7.1-year average life maturity; the Class C and D tranches - rated single-A plus and single-A minus, respectively - also carry an average life of 7.1 years.

Also brewing in the pipeline is a U.K. issue for Unique Pub Finance Co. This GBP850 million pub securitization issue will carry three tranches rated triple-A, single-A and triple-B, with respective weighted average lives of 8, 20 and 28 years.

These multi-billion dollar deals promise to set the tone for what's ahead in European ABS, said market sources. "Markets continue to be rather subdued - there is again a lot of talk about the deals that are coming, but few have arrived yet," reported Merrill Lynch. "That suggests a busy period ahead of us and a different one at that, as more investors are assuming a defensive stance."

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