The primary pipeline continued to churn out deals with the European ABS calendar registering a 23 billion ($29.13 billion) lineup of issues in the beginning of last week.
Dealers began work for Globe Pub Issuer, a GBP257 million ($483 million) whole business pub deal for R20 consortium, who earlier this month withdrew its bid for U.K. pub manager Mitchells & Butlers. The transaction is backed by tenanted pubs managed by Scottish and Newcastle.
The two tranches offered are rated single-A and triple-B with 12.7- and 7.3-year average lives. The estate contains 445 pubs with GBP36.5 million of Ebitda. The transaction includes a number of structural divergences from a standard pub whole business deal. "It looks to me like they are trying to protect the creditors outside the structure by restricting what can be done within it in terms of enforcement and selling assets," explained Michael Cox, an analyst at the Royal Bank of Scotland. "There are other unusual features such as a short trading history of the assets under a tenanted operation format."
Cox added that these are offset by lower leverage, although it will be up to individual investors to decide whether they agree with the rating agencies' call on how much leverage a transaction having these features can support. "I would guess that the small size means it will still sell, although it might price a little wider than recent precedents such as Greene King," Cox said.
The first deal from a new Kreditanstalt fuer Wiedersbau (KfW)-sponsored synthetic platform for CMBS was announced. Primus Multi Haus 2006-1 will resemble the structure of the Promise and Provide transactions. The inaugural deal is a 382 million synthetic securitization of German multi-family housing for Nord LB, with around 119 million of the capital structure expected to be funded. The collateral included 29,031 flats in 334 multi-family blocks owned by 24 German housing associations, with a 58.8% LTV.
German cellular phone part manufacturer, Balda AG, also announced its securitization of European receivables. The deal is expected to issue up to 60 million in size and will be issued via German regional bank Landesbank Baden Wuerttemberg. The initial transaction is expected to offer investors 40 million.
On the RMBS side of things, several new subprime deals joined the line-up. A new U.K. near-prime RMBS dubbed Clavis Securities was announced, with the underlying loans originated by GMAC-RFC. The GBP600.3 million deal for WestLB's Basinghall Finance offers three tranches of triple-A rated notes in sterling and euro denominations, alongside four subordinated tranches rated double-A to double-B - no IO strip was structured. The pool has 78.9% LTV and includes 55.6% self certified loans along with 22.4% Buy-to-Let mortgages. No bankrupt loans are included within the pool.
Two new credit card deals also began marketing last week. MBNA is in the market with the latest tranches from its U.K. de-linked program. The 7.0-year tranches offered are GBP50 million of single-A rated notes and GBP70 million of triple-B rated notes with sufficient subordination for a further GBP880 million triple-A tranche to be issued in future. MBNA was last in the market with CARDS 2006-A1 in March this year.
HSBC began marketing its inaugural U.K. credit card-backed deal, Turquoise Card Backed Securities Series 2006-1, sized at $1.0 billion. Turquoise offers $880 million of 3.0-year triple-A rated notes, $55 million of single-A rated notes and $65 million of triple-B rated notes.
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