While European ABS issuance for the first half of the year came in at 132 billion ($157 billion) - topping 2004's first-half tally of 103 billion - the more amazing statistic is that approximately 70% of this issuance was printed during the second quarter. Market analysts said that issuance should slow in the second half of the year, with an already lighter pipeline visible last week, leading to further spread tightening this year.
The Royal Bank of Scotland analysts said that spreads moved in tighter toward the end of the week but subscription levels are just making the grade, rather than reaching massive multiples. Among the new deals offered was a GBP400 million nonconforming U.K. RMBS deal for Money Partners, which is 20% owned by Kensington Group. Money Partners targets first- and second-charge mortgage borrowers.
The provisional pool includes 22% second-lien loans and had a 74.9% weighted average LTV. Fast- and slow-pay A class notes are offered with 0.8-year and 2.9-year average lives, the fast-pay tranche is euro-denominated and the slow pay tranche offered in both euros and sterling.
Marketing was also underway for a refinancing of Vesteda Residential Funding 1, a Dutch CMBS deal. The new transaction offers four tranches - all rated triple-A - with three-, five-, seven- and 10-year average lives, totaling 1.3 billion ($1.5 billion). Vesteda will fund a portfolio of 31,000 residential units in the Netherlands.
Underwriters began marketing Ursus EPC, a GBP150 million U.K. CMBS transaction from the joint conduits of Bear Sterns and JP Morgan Securities. Ursus has five classes rated from triple-A to double-B with 3.9- to 4.4-year average lives on offer.
Price talk was released for the 750 million Greek credit card deal for EFG Eurobank, dubbed Karta 2005-1. The first-ever deal backed by Greek credit card accounts consists of three five-year tranches, with triple-A notes talked in the 17 basis point area over three month Euribor, single-As in the 30 basis points area over Euribor and triple-B paper in the 60 basis point area over Euribor. The deal is structured similarly to U.K. master trusts but includes some adaptations addressing Greek securitization law nuances. Ultimately the structure is designed to function like a U.K. card transaction and sources close to the deal report that investor interest was going well despite this slight variation in structuring.
Price talk emerged for Business Mortgages Finance 3 - the third CMBS transaction for independent lender Commercial First Mortgages. The triple-A rated 3.5-year A class notes were talked in the low-to-mid 20 basis points over Libor and the single-A rated 6.5-year notes being talked in the 70 basis point area over Libor. All tranches are offered in both euro and sterling denominations.
Dealers have also released guidance on Paragon Group's latest U.K. buy-to-let RMBS transaction, Paragon Mortgages 9, totaling GBP700 million. The senior notes, offered in dollar, euro and sterling denominations, have a 3.2-year average life and are being talked in the 18-to-20 basis point range over Libor - individual tranches will be sized based on demand. The double-A notes are talked in the 30 basis point area over Libor and the single-A rated notes are talked in the 50 basis point area. Both tranches are offered with a 4.8-year average lives denominated in euros and sterling.
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