Although this month's primary lineup may be somewhat overshadowed by activity in the secondary markets, it's likely that new deal issuance will nonetheless set a January all-time record, market sources said.

According to traders, there was a flurry of activity in the secondary market for short-term, dollar-denominated European ABS paper, while investors were awaiting the $4.8 billion RMBS from Northern Rock. "Despite the positive tone expressed in secondary markets, we expect that 2003's first quarter will mark a very large new-issue calendar, including postponed 2002 deals," said analysts at Royal Bank of Scotland. "Primary market activity may keep spreads from experiencing a great deal of tightening."

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