After a sluggish 1Q05, European ABS volume is back on track and, analysts report, that with a healthy visible pipeline in the works, 2005 year-end volumes could surpass January forecasts.


The European Securitization Forum said issuance in the European securitization market totaled €48.1 billion ($58.2 billion) during the first three months of the year, a 13.8% decline from €55.8 billion issued over the same period in 2004. But with issues such as Germany's €6 billion pension securitization in the market, volume is expected to increase.


According to Dresdner Kleinwort Wasserstein, year-to-date volume currently stands at €113 billion with supply dominated by RMBS (48%), while CMBS (17%), arbitrage CDOs (10%), balance sheet CDOs (7%) and subprime MBS (7%) make up the difference. CMBS issuance this year stands at €19.3 billion, only €1.2 billion short of the 2004 full-year total. Balance sheet CDO supply has been driven by two recent jumbo deals, Geldilux-TS- 2005 from HVB and the SME CLO/MBS deal BBVA Hipotecario 3, and currently stands at 61% of the €12.7 billion full-year 2004 total. "With €14.2 billion in the publicly known near term pipeline, our full year forecast of €230 billion may be exceeded," DrKW analysts wrote.

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