Though six new deals have priced in the European securitization market so far this month, the pipeline is still robust, maintaining the strong momentum already seen this year. With a E6 billion transaction looming and several Italian issues marketing as well, the primary market continues to dominate February activity.

According to market sources, unofficial price guidance emerged for the E6 billion deal from the Permanent Financing (HBOs) Master Trust structure. It's the second transaction to emerge in the series and is co-managed by JP Morgan Securities, Lehman Brothers, Deutsche Bank and Credit Suisse First Boston. Sources at Royal Bank of Scotland said unofficial talk suggests pricing levels will be in line with the Granite 2003-1 deal, which priced earlier this month.

Also emerging last week was price talk for the Cartesio 2003-1 Italian sales/leaseback of hospitals in the region of Lazio. Talk for the A1 notes with a 21.5-year weighted average life was heard in the 50 basis points over six-month Euribor area, and talk for the sterling-based class A3 notes with a weighted average life of 25 years was heard at Gilts plus 90 basis points. Merrill Lynch leads the deal. Price talk for Intesa's E2 billion transaction dubbed Sec 2 Srl were heard at 17 basis points over Euribor for the Class A1 notes, and the class A2 notes were met with talk at 28 basis points over. Market sources expected the deal to price late last week.

Over E3.5 billion of Italian paper has priced so far this year, and at least one other E4.5 billion is expected. New on the primary calendar is a E593 million transaction for Credifarma dubbed CF Finance S.r.l. It's a securitization of advances made by Credifarma to Italian pharmacists, giving investors the opportunity to gain exposure to local health authorities for Italian Pharmacy receipts. It differs from last year's Pharma Finance, which securitized real estate, auto and equipment leases, and personal and mortgage loans to the Italian pharmacy sector.

New French CMBS paper emerged last week in the 12th transaction from Morgan Stanley's ELOC series. The latest, dubbed Gorgons, is a E340 million securitization of commercial mortgage loans. The underlying collateral is from a single office building in the Bercy area of Paris. The building, Zeus, is privately owned; its three major tenants are Vivendi Universal Publishing with 30% occupied, the National French Railway Syndicate (SNCF) occupying 22%, and Credit Lyonnais occupying 7%.

The class A tranche will carry a weighted average life of seven years, and the Class B, C and D notes have a weighted average life of 7.5 years.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

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