The year may have started off quietly for European securitizations, but it exploded on the covered bond front.

Similar to the pace set in 2011, European covered bonds picked up sharply last week. According to a Societe Generale report, the month of January has already tallied 15 deals that have been mostly launched in euros. Last year, January issuance volume closed over €40 billion.

However, originators have paid the price for the more volatile market conditions. According to the SocGen report, the new-issue premia that sellers have had to pay on new deals ranged from 10 basis points to 20 basis points despite strong investor demand that saw the deals sell out quickly.

"The question now is how long will this rapid pace of new deals be maintained," SocGen analysts said in the report. "January 2011 clocked up a good score for the euro area, with around €44 billion of covered bonds issued. That will be the benchmark this time around."

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