Three new transactions totaling 1.7 billion ($2.06 billion) entered the late July pipeline last week, heralding a potential delay of the routine August lull. U.K. CMBS and RMBS currently dominate the European ABS pipeline, accounting for 5.2 billion of a total 7.7 billion.
Marketing is underway for Equity Release Funding 5, a GBP379 million ($661 million) deal for Norwich Union backed by reverse mortgage products offered to older borrowers, with interest and principal repaid once the property is sold. The maximum LTV is determined by the borrowers' age and expected remaining lifespan. The provisional pool includes 8,685 loans with a weighted average borrower age of 69.7 years and a 24.4% LTV.
More nonconforming RMBS also came into the pipeline with the GBP400 million SPS 2005-2, for Southern Pacific Mortgages. SPS offers seven tranches including GBP143 million of 0.8-year fast-pay class A notes and GBP192 million of 4.4-year pre-placed notes. The provisional pool has a 77.2% weighted average LTV and two months seasoning.
On the CMBS front the GBP393.7 million Bellatrix Eclipse 2005-2 deal from Barclays Capital's conduit began marketing early in the week. Bellatrix includes 13 loans on 39 properties occupied by 238 tenants. The underlying property from Deco 2003-Cento will be refinanced into Deco 2005-EU1. The new transaction has an increased loan backed by the Centro shopping center - from 549 million to 680 million - and includes a further six loans on 48 properties with a total 1,618 tenants. Deco 2005-EU1 will offer 900 million of notes backed by a portfolio that has a 78% allocation in retail space, 13% in offices and 6% in mixed use.
Underwriters priced Dutch CMBS Vesteda Residential Funding II after revising guidance. The new transaction offered four triple-A rated tranches totaling 1.3 billion. The pieces priced at 12 basis points over Euribor, 15 basis points, 20 basis points and 28 basis points, respectively. Vesteda II refinanced Vesteda Residential Funding I, a portfolio of 31,000 residential units in the Netherlands. And spread guidance was also revised for Goldman Sachs GBP659.2 million Fleet Street Finance One CMBS conduit. The 5.4-year class A tranche was revised to 30 basis points over from a level in the high 20s, while double-A rated class B notes, single-A rated class C tranche, and triple-B class D tranche were originally talked at 47 basis points from low 40 basis points, 70 basis points from mid 60 basis points, and 95 basis points from high 80 basis points, respectively.
The conduit is backed by three loans on 156 properties. Care homes account for 52.2% of the pool, hotels for 33.8%, and shopping centers for 14%. Sources at The Royal Bank of Scotland said that underwriters were expected to price the transaction late this week or early next week.
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