The significant June primary deal flow and the burgeoning July pipeline have revived talks of another record-breaking year for European securitization volume. But how these volumes will impact spreads in the run-up to the summer break is not clear and industry players are questioning whether the massive volume in the primary market will have a blanket effect on spreads.
The biggest surprise has been the sheer number and amount of deals done so far this year. Reported figures from Barclays Capital show that issuance is up 7% compared to the first half of 2005 for ABS as a whole, with CMBS up 30% for that same period. According to figures from Commerzbank, the U.K. continues to drive European year-to-date issuance, matching that of the country's total issuance in 2005. U.K. RMBS is slightly up year-over-year at 64% of total U.K. volume. Multi-jurisdictional issuance has seen the greatest increase in the first half of 2006, 82% of growth in this segment of the market has been CLO driven.