CMBS volumes tallied strong growth in 2004, but not to the levels industry sources had expected, which should translate into plenty of business for the 2005 calendar. "We should see a substantial increase in 2005 as most new originations did not come up as bonds yet. This should mean a strong first half for CMBS issuance," said one market source.

According to figures reported by Moody's Investors Service, European CMBS issuance totalled approximately 22 billion ($28 billion) in 2004, representing 25% annual growth compared to the 17.5 billion seen in 2003 and the 22.5 billion in 2002. The U.K. dominated, accounting for 64% of total issuance. Sweden and France followed with each country contributing 9% of the market and Germany and the Netherlands each made up 5% of the market. Issuance volume was dominated by borrower needs for efficient funding and the growing investor demand for this product. Market sources said there is potential for further tightening across the capital structure in 2005.

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