HBOS upsized its jumbo RMBS issue, Permanent Financing, last week, increasing the amount of sterling paper and U.S paper available (see related story, p. 10). The deal was upsized by GBP1 billion (US$ 1.6 billion) to GBP4.5 billion (US$7.5 billion).

Despite its size, the deal priced in line with the tighter levels seen in October.

It's a sizable chunk added to the November calendar. According to sources at Royal Bank of Scotland, there has been more volume in the first two weeks of November than the whole month last year. This is a busy start that will likely satiate any concerns that issuance predictions might not be met based on the amount that was priced last month.

According to RBS, at least E152 billion (US$178 billion) in European ABS has been priced and at least E28 billion (US$32.7 billion) is expected before year's end, ensuring its E165 billion (US$193 billion) to E170 billion (US$198 billion) forecast will be met this year. Whether spreads will hold firm in the onslaught of supply remains to be seen.

"Money managers, conduits, SIVs and others are competing for prime consumer issues at the triple-A level, while some funds, banks and CDO managers have moved down the credit curve, competing for scarce non triple-A paper," said analysts at Dresdner Kleinwort Wasserstein.

New on the calendar this week is a E121.5 million (US$141.6 million) German RMBS for Deutsche Postbank AG to be placed through Deutsche Bank. The deal will include a sizeable concentration of East German-originated loans, said market sources. This deal could feel some pressure on guidance levels, following the Fitch Ratings' announcement that "delinquencies and credit events in German mortgage portfolios are on the rise, with home loans to borrowers in the eastern regions and those in multi-family buildings a particular concern."

The agency asked for a greater level of transparency on mortgage loan pools and said that borrowers based in Eastern Germany and those living in multi-family apartment blocks are growing weaker and may add performance pressure to RMBS deals.

On the Dutch side, at least E1 billion (US$1.17 billion) of paper backed by prime RMBS will began marketing under Quion 14 B.V. and Quion 30 B.V. (both subsidiaries of NIB Capital). The structure will include one dollar-denominated triple-A piece.

From Italy, a new E315.5 million (US$369.2million) deal, backed by a mix of residential and commercial mortgages, began circulating also. Claris Finance 2003 marks the seventh Italian mixed MBS of the year. Price guidance on the triple-A piece was 33 to 34 basis points over the three-month Euribor. Deutsche Bank is managing the deal for Veneto Banca and Banca Meridianca S.p.A.

Italy also began marketing its E4.5 billion (US$5.2 billion) government securitization of personal unsecured personal loans under S.C.I.C. The preliminary structure included four triple-A rated classes, three bearing floating-rate coupons and one fixed-rate piece.

From the U.K., RMBS is ending the year with a bang. Permanent Financing's increased issue was still oversubscribed, sources said.

Meanwhile, corporate structures continue entering the pipeline, and last week another CMBS deal be|

gan marketing.

ABN Amro and UBS Warburg last week priced a GBP300 million (US$506 million) securitization of rental cash flows from

British Telecommunication Plc. The trust, called PremierTel Plc, was structured in two tranches, rated double-A and single-A. Though the deal was unwrapped, it allowed the company to issue bonds at a higher credit level than BT's triple-B rated unsecured debt. The double-A piece priced at 70 basis pointsover Gilts due 2021 and the single-A notes priced at 120 basis points over Gilts.

On the German side, a new E965 million (US$1.12 billion) securitization backed by cash flows from German auto leases for Volkswagen leasing GmbH began preliminary marketing through West LB. Past deals have typically been backed by auto loans. The structure will include two tranches, rated triple-A and single-A plus, respectively.

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