The European pipeline is finally taking a breather, though, with just two weeks left, there's still an estimated E15 billion (US$18.2 billion) of new issues ready to print.
Total supply in 2003 should surpass the E180 billion (US$218 billion) mark, a 40% increase over year-end figures recorded last year.
At least five RMBS deals and cash CDOs, three CMBS, two consumer deals and the Italian high-speed train infrastructure deal are still expected to price.
Details were released last week for the E5 billion (US$6.07 billion) Infrastructure SpA securitization, which will refinance bank loans for the construction of a high-speed rail service in Italy that would service the distance between Turin and Naples. The time constraint, however, could push the deal into early next year, but some sources maintained that a late December launch is still possible.
According to sources familiar with the deal, the capital structure is expected to include a E2 billion (US$2.4 billion) 10-year fixed rate tranche, while the remaining E3 billion (US$3.6 billion) will be offered through a 15-year index-linked note and a 20-year fixed-rate note. All notes will be rated double-A in line with the Republic of Italy's rating.
More CMBS paper has found its way onto the 2003 calendar. Last week, the E820 million (US$995 million) securitization of Paris La Defence, a large office complex located right on the fringes of the so-called "city of love," saw talk for its class A notes at 42 to 45 basis points over Euribor. Couer Defense also saw guidance on its double-A class at 75 basis points and its single-A at 100 to 110 basis points; a triple-B class was talked at 190 to 210 basis points.
A second French CMBS adds another E148 million (US$179 million) to the calendar. Wuerthyp F-1 is a synthetic structure referencing 131 properties. Guidance for its triple-A notes was 40 to 45 basis points over Euribor, while its double-A notes were talked at 20 to 75 basis points. The deal was expected to price by the end of last week.
Also looking to price was the E1.7 billion (US$2.0 billion) synthetic CMBS, Global Commercial 2. The deal is backed by 93 loans on 200 properties in 14 countries, including the Czech Republic and Turkey. The split triple-A rated tranches were talked at 50 to 53 basis points over Libor. Global Commercial 1, which priced last December, saw the triple-A rated notes price at 60 basis points over Libor.
"Deals are beginning to show the signs of the year-end blues," reported analysts at the Royal Bank of Scotland. "Whilst spreads are holding in, we hear from several key market participants that investors are receiving full allocations on deals and transactions are pricing at the wider end of talk."
Banco Alves Ribeiro of Portugal was out last week with its E100 million (US$121 million) lease ABS AR Finance, issued through BNP Paribas. According to market sources, this is the first issue that offers exposure to Portuguese real estate leases, deviating away from the dominating RMBS structure. The deal is backed by commercial and residential property contracts - 25% (the class B portion) of the issue is supported by a guarantee from the European Investment Fund (EIF). Two triple-A pieces are being marketed with guidance at 32 to 25 basis points over Euribor. The deal is expected to price before Christmas. The guaranteed class B notes are talked at 10 to 12 basis points over Euribor.
DZ Bank initiated its European ABCP programme last week. Coral Capital LLC will buy loans and issue euro and U.S. dollar-denominated ABCP to finance purchases. About E900 million (US$1.09 billion) of notes were expected to be funded on its first go - it will raise about E570 million (US$692 million), GBP46 million (US$80.13 million) and US$260 million. According to market sources, the changes made in regards to German true-sale transactions should encourage more of these transactions, which provide funding and risk transfer.