Though January primary volumes in Europe closed at 11 billion ($13.2 billion), most of the activity resulted from the giant Northern Rock Granite transaction that accounted for almost 8.7 billion ($10.5 billion) of total issuance volume.

February primary activity continues to build while secondary trades went a bit muted ahead of the new iBoxx ABS-50 index, which debuted Feb. 1.

On the primary issues front, Banca Italease began marketing its 191.8 million ($231.2 million) new leasing deal, Italfinance 2006-1. The transaction is a securitization of the deferred purchase price of the receivables from four of the bank's previous transactions - the Italease 4-7 transactions. The notes benefit from excess spread created by over-collateralization of earlier transactions - the leases were sold at discount prices to maintain a lease yield of 500 basis points over Euribor - and principal from repayment of the lease or sale back to the originator of the discount element. The two rated tranches on offer have triple-B and double-B ratings.

In addition, marketing is under way for Highway Management (City) Finance, a GBP63.4 million ($112.4 million) project finance initiative deal to finance and operate two motorways, the M1 and M2 near Belfast. The European Investment Bank will provide further financing via a GBP63 million ($111.8 million) loan, supported by GBP8.3 million ($14.7 million) of mezzanine debt. The underlying contract is a 30-year construction, finance and operating agreement to upgrade and maintain the roads.

Premarketing also began for Harbourmaster Capital's 700 million ($843 million) partially funded Harbourmaster Pro Rata CLO. Harbourmaster offers 198 million ($238.6 million) of funded notes under a 470 million ($566 million) senior credit default swap.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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