The U.K. CMBS market took another leap forward at the end of February as Deutsche Bank closed a transaction backed by the revenues from a Manchester shopping complex called the Trafford Centre on behalf of Peel Holding PLC.

The deal, called Trafford Centre Finance Ltd., and jointly underwritten by Deutsche and Royal Bank of Scotland, was first in the market in October last year, but was withdrawn after it proved impossible to place all the bonds at a price that Peel was happy to pay.

This time, however - with the deal fully underwritten, rather than on a "best efforts basis" - the market proved receptive and it was all sold, though at similar prices to those first marketed last year.

The deal, totaling GBP610 million ($967 million), was chopped into two floating rate tranches and three fixed rate pieces, with ratings of triple-A down to triple-B from all four international agencies. Pricing varied from three month Libor plus 51 basis points for 9.4 year average life senior floater rated triple-A to 8.28% for the triple-B fixed rate piece with a average life of 20.6 years.

Despite the hiccups, Peel's managing director, Peter Scott, was obviously glad to finally get hold of the money relatively cheaply. "This very successful securitization enabled

Peel Holdings to refinance its existing debt at a very attractive all-in cost and to raise additional funds for the Peel Group to utilize for general corporate purposes."

The cost of the GBP340 million fixed rate borrowing that Peel took out to build the center was 9.3% and this transaction bears an average interest rate of around 7%.

The transaction - which came to Deutsche when the German bank bought Bankers Trust and therefore Lemy Gresh's innovative securitization team - was sold to about 30 investors. Not surprisingly, banks took the floaters and the fixed rate tranches were placed with insurance companies and pension funds.

Elsewhere in Europe, Nomura International closed the much-trailed deal backed by receivables from around 56 million bottles of champagne at various stages of production.

The deal, for champagne house Marne et Champagne, was worth a total of e396 million ($383 million). It was split into three tranches: two tranches were rated A2/A by Moody's Investors Service and Standard & Poor's and a third was rated Baa2/BBB.

Pricing was 100 basis points over Euribor for the e91 million A1 tranche, 90 over for the e245 million

A2 tranche and 165 over for the e60 million mezzanine piece.

A Nomura official said that pricing was tricky because there was no real comparable benchmark. The paper was sold to its natural home in the banking sector, but also saw significant demand from fund managers and insurance companies hungry for the yield pick-up available to those willing to go down the credit curve. Some first time ABS buyers participated.

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