With the markets closed last Monday to observe Easter, European ABS activity finally took a breather. Just 1 billion (US$1.19 billion) of visible new paper began circulating when activity resumed on Tuesday.

Approximately 6.35 billion (US$7.57 billion) of paper has emerged so far this month, said market sources.

New supply continues to be well received by investors and spreads have held firm across all assets classes, said analysts at Morgan Stanley. In the primary market, the 475 million (US$567 million) AyT Promociones II was expected to begin roadshowing by the end of the week. The deal is backed by a Spanish developer loan that finances construction on new properties.

The deal is a repeat for Ahorro Corporacion, which will act as joint lead on the transaction with Commerzbank and Caja de Ahorros Confederales. The prior deal, called AyT 7, launched in June 2002. A 3.5-year, 319.8 million triple-A priced at 30 basis points over Euribor.

Price talk for the Deutsche Bank-led 2.2 billion (US$2.62 billion) synthetic RMBS Provide Blue 2004-1 came out last week. The triple-A is talked in the 20 basis point area over Euribor, the double-A is talked at 40 basis points, the single-A is talked at 55 basis points and a triple-B is talked at 95 basis points.

Alehouse Financing was expected to price GBP328 million (US$584 million) in seven-year notes, which were talked at 85 basis points for the single-A tranche and 185 basis points for the triple-B tranche. As of press time, the deal had been postponed due to the failure of the current bondholders to agree on the terms of the refinancing. According to analysts at the Royal Bank of Scotland, an agreement is required for the deal to move ahead.


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