Despite the growing perception among investors that European securitizations are a safe haven among the shaky global equity markets, volume for the first half of this year is down 6.3% to E60.7 billion from the E64.8 billion issued during the same period last year, reported the European Securitization Forum.
According to the ESF report, RMBS and CDO transactions dominated the first-half issuance, and a steady decline in non-mortgage asset-backed securities is cited as the main instigator for volume shrinkage. Within this sector, volumes were reported to have decreased by 19.4% to E32.3 billion from 2001 volumes of E40.1 billion. This is a far cry from the year-end momentum that had many market participants hopeful for a repeat of 2001 volume, if not a slight improvement.
"Several transactions have been delayed until the second half of the year, contributing to the slower securitization pace," said the ESF. To be sure, the recent activity that has stormed the market in the past two months is perhaps most indicative that there is no lack of appetite among investors, and illustrates a more cautious market in the face of economic deterioration.
According to the ESF report, issuance in the second quarter of this year increased nearly 60% to E37.6 billion from the E23.1 billion recorded in the first quarter. And while the summer doldrums seemed to have reached the August pipeline, market participants say September is gearing up to be another busy month.
On the CDO front, there are four issuers lining up to debut transactions so far. In the balance sheet CDO arena, Fortis Bank NV will launch Park Mountain Capital 2002-1 BV, and NIB Capital Bank is gearing up its Latitude Synthetic I BV. Meliorbank plans to issue a managed arbitrage CDO, Zoo ABS 1, and Argon Capital is planning to issue a static pool CDO.