Although the European pipeline remains sparsely populated, with just four new issues marketing, the sheer size of the offerings more than makes up for any lack of supply. The four transactions circulating last week totaled GBP12 billion (E17.4 billion and US$22.1 billion, respectively) and met with such strong demand, that even though some deals were increased in size, a spread crunch was still visible.

Both Northern Rock's Granite Trust 2004-1 deal and Mortgage Trust's buy-to-let First Flexible No. 6 were upsized during marketing, and priced at the tight end of initial talk.

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