Steady primary issuance continues to steal the market spotlight, keeping secondary trades at a virtual lull. March issuance has already reached $5.9 billion, with another $13.8 billion expected to price before the end of the month.

According to Merrill Lynch's investment manager survey, there is plenty of cash to put to work, although risk aversion is an increasing factor. Current issues in the market demonstrate a desire for safety, as investors are drawn to larger plain vanilla deals, mortgages and seasoned structures with short- to medium-term maturities.

The market last week enjoyed yet another surge of significant U.K. RMBS issuance. Abbey National followed a series of deals that have hit the primary since the start of the year. Sources indicated that tranches priced in line with guidance: a 0.9 year money market tranche came in at Libor minus 4 basis points, similar to last month's Permanent Financing No.2.

New in circulation is a $1 billion equivalent Spanish CLO - dubbed GC FTGENCAT II - for seven banks within the Banco Sabadell, BBVA and BSCH groups. The region of Generalitat de Catalunya will guarantee the $749 million equivalent class AG notes and the $18.6 million equivalent BG notes. The structure also includes $186 million of class AS notes, $18.6 million of class BS notes and $33.2 million equivalent of class C notes.

Price Guidance was out for the $1.08 billion equivalent Dutch securitization from NIB Capital. Talk on triple-A notes was 26 to 28 basis points over Euribor, while talk on the class B notes was in the 65 basis point area. Talk was at 130 basis points over for the class C, and the class D notes are at the 360 basis point area.

Dutch issuer ASR bank has talk going for its $1.27 billion equivalent RMBS, dubbed Delphinus 2003-1. At the triple-A rated level, the notes are issued in both fixed- and floating-rate tranches, both with 6.5-year average lives; talk was heard at 30 basis points over mid-swaps and 28 basis points over Euribor, respectively.

Price talk for the BNP Paribas-led securitization dubbed The Hospital Company Issuer plc has been circulating in the 85 to 90 basis points arena over the 2.5% 2031 index-linked gilt for its single, MBIA-wrapped tranche.

Market sources also indicated a possible securitization of Italy's high-speed rail network Treno Alta Velocita (TAV). The issue could be as large as $3.18 billion equivalent from the government agency Infrastrutture SpA. Sources said that revenues from rail companies utilizing the track would back the notes. "The project involves building a high-speed line from Naples to Turin and may require a total of $21.2 billion equivalent in funding over the next 10 years," said sources at Royal Bank of Scotland.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

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