Market predictions hint that 2003 could bring record-high issuance volumes, generated primarily by the strength that European asset securitization structures have exhibited in the face of economic stress. While the pace this month has been slow in starting, a trickle of new issues has already made January 2003 busier than the beginning of last year, when strong year-end issuance in 2001 dwarfed January 2002 activity.

RMBS looks set to dominate January issuance. The market kicked of with the US$3.8 billion U.K. RMBS Granite 2003-1 issue - the fifth and largest issue to emerge from Northern Rock's master trust structure. According to Dresdner Kleinwort Wassestein, if the deal comes to market this month it will contribute to the largest issuance seen for January. The deal is co-managed by Salomon Smith Barney and Merrill Lynch. Similar to prior issues, the U.S. dollar tranches dominate the deal, with the Euro tranches the next largest, market sources said.

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