The new issue market in Europe continued to see more primary supply build giving way to optimism that Europe maybe experiencing a securitization market revival.
According to market reports, FCE Bank has mandated Barclays Capital, Deutsche Bank and HSBC as Joint Leads for its upcoming EUR 460.8 million ($670mn) GLOBALDRIVE 2011-A German Auto ABS transaction. The class A, EUR 432mn, triple-A rate tranche is being offered with a 1.98 year maturity; and the class B, EUR 28.8mn, double-A tranche is offered with a 3.81 year maturity. The structure will be placed via the public market.
BNP Paribas has also launched its Phedina Dutch RMBS program. The deal Phedina Hypotheken 2011-I BV will be lead managed by Banca IMI, BNP Paribas, ING Bank NV, Lloyds Bank Corporate Markets.
The capital structure includes a class A1, triple-A rated, EUR300 mn tranche; and a class A2 1.13bn, triple-A rated tranche. It will also include a EUR 70mn, class B piece that is rate triple-B.
Deutsche Bank AG is also marketing its new U.K. CMBS deal, DECO 2011. The structure is backed 100% by U.K. office properties and offers investors a GBP235mn ($385mn), Standard & Poor's 'AAA' rated class A tranche and GBP30 mn,class B,'AA' rated tranche.
The deal is the first of its kind in Europe since 2007. According to analysts at Unicredit, the top tranche was rated 'AAA' by S&P and DBRS but neither Fitch Ratings or Moody's Investors Service has been asked to grade the securities. Last week, Fitch provided an unsolicited assessment of DECO 2011 and said the issue would not obtain Fitch's highest rating due to the uncertain long-term attractiveness of the assets.
"We believe primary new issue will continue to trade relatively independent of peripheral product but may struggle to tighten and will remain range-bound," said analysts at Deutsche Bank in the bank's securitization weekly report. "Despite peripheral RMBS seniors trading inside of the sovereign, we continue to regard, robust structural enhancement, pool seasoning, and low LTVs as more than sufficient to withstand severe credit deterioration in pools. Yet while on a fundamental basis these bonds often look very attractive, with for example 20% plus enhanced senior Greek bonds now yielding low double digit IRRs, technicals are likely to remain weak in the short term."
