European deal volumes are expected to meet year-end targets, if not surpass them, especially as October turns out to be the busiest month on record in Europe, with EURO19 billion. The market is on target for breaking the $100 billion in issuance and the pipeline continued strong throughout November and is expected to continue to be strong at least into the first two weeks of December.

And out of the wings to add more bulk to the year are the large CMBS for British Telecom (BT) and the EURO3 billion lottery securitization for the Italian government, who last week began marketing their packages.

The increased activity in the term sector is also going to spill into the conduit sector. One trend that has become immediately noticeable in the past few months of this year was the increased conduit activity, as corporates were using them for warehousing facililities. "We will see a temporary blip in CP outstanding at year-end, as many issuers are using conduits in the fourth quarter as a warehousing facility for assets destined for the public market," says Steve Gandy, managing director and European group head in the global asset-backed securitisation group at Bank of America.

"Issuers with a good name, that come to market with large transactions, may opt for conduit financing to avoid paying up one or two basis points, as the market might find it difficult to absorb such large transactions in the fourth quarter," Gandy added.

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