Last week got off to a quiet start with the July 4 holiday dampening the fireworks on the European secondary market. However, primary flows continued to set off sparks. After explosive record issuance in June, July is poised to offer more of the same as the primary pipeline keeps building ahead of the summer slowdown.

June 2006 has turned out to be the biggest month in terms of European securitization primary issuance, with a total of 59.6 billion ($76 million) of bonds coming to market. Analysts at the Royal Bank of Scotland said that the record had been previously set in November last year, where spreads widened on the back of heavy supply. By contrast, spreads have broadly held tight over the last month. Analysts at Deutsche Bank said that floater spreads have proved steady with senior bonds widening limited to around one basis point and no observable pricing impact on subordinated paper.

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