Variety continues to dominate the building European RMBS pipeline with a number of jurisdictions lining up deals to be launched in the coming weeks. Volumes continue to fall short of 2005 business, however, as analysts at Morgan Stanley estimated that first quarter European RMBS issuance was down to $38 billion from $57 billion recorded at the same time last year.

Despite the shortfall in volume, analysts said they did not anticipate new issuers to join the 2005 pipeline but did expect at least some of the volume differential to be made up by increased issuance from Italy. "Many Italian banks await covered bond legislation, although we understand they will need to use RMBS this year to meet funding requirements," reported analysts at Morgan Stanley.

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