Though it's still a mere trickle of activity compared to previous years, the European market saw a few deals price last week, and judging by the spreads, sources say there appears to be an unsatiated buyside hunger for ABS paper.
The Italian lease receivables, Leimpresa Finance S.r.l, priced its EURO669.9 million transaction last week, issued to investors in two tranches of floating-rate notes. The triple-A notes priced at +33 basis points over the three-month Euribor, demonstrating tighter levels than the comparable Secureseal Series 2 issue that was in the market last month. At press time the Class B notes had not priced.
CDOs kept up their weekly presence in the market. Last week it was CDO Master Investments 3 S.A., a synthetic, static-pool transaction managed by BNP Paribas. The $150 million transaction was offered in three soft-bullet tranches with an asset profile that includes both credit default swaps and ABS.
Investors still feel comfortable with this asset class - the proof is in the pricing, which maintained similar levels to the first CDO Master Investments, which priced late last year. The triple-A rated Class A tranche priced at +55 basis points over the three month Euribor; the Class B notes, rated double-A, priced at +75 basis points; and the triple-B rated Class C tranche priced at +240 basis points.
FTYMPE Bancaja-1 was also in the market with its EURO600 million Spanish SME CLO. The JP Morgan-lead deal was offered in five tranches of floating-rate notes. Again, this issue also managed to price within tighter levels than the previous FTYMPE ICO-2, completed last year.
Both the guaranteed and non-guaranteed Class A1 notes came in at tighter levels and priced at 1.5 and 38 basis points over the three-month Euribor, respectively. The guaranteed Class A2 notes priced at 6 basis points; the non-guaranteed notes within that class priced at 48 basis points and the Class B notes priced at 180 basis points.
Forthcoming from the region is the fourth Cedulas Hipotecarias issue from Caja Madrid. At press time Commerzbank Securities had been mandated as joint lead manager of the issue.