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Banking industry

European Trading Activity Slows Down in July

Strategic Insights

— 2 min read

Summer has taken hold of Europe, and the same can be said about the trading activity. The market seems to be on summer holiday, with only a few trades to speak of. The week started with a mere 3.2 billion euros' worth of notes being publicly marketed. This is a stark contrast to the usual activity, with new issuance volumes averaging 22.8 billion euros during the first half of the year and 21.2 billion euros in July last year. The situation isn't much better, with a total of 12.6 billion euros being traded in July, a far cry from the 22.8 billion euros average.

Key Takeaways:

  • The European trading activity slowed down significantly in July, with only four transactions publicly marketing for a total of 3.2 billion euros.
  • New issuance volumes in July were light, totaling 12.6 billion euros, compared to a monthly average of 22.8 billion euros during the first half of the year and 21.2 billion euros in July last year.
  • The Deco 2005-EU1 CMBS transaction, led by Deutsche Bank's conduit, will be rated from triple-A to double-B/triple-B minus and priced with 6.7-year average lives.
  • The deal includes a 680 million loan backed by the Centro shopping center in Germany and six other loans on 48 properties with a total of 1,618 tenants.
  • Price guidance for the fast-pay A class notes is in the 19 basis point area over Euribor, while the slow-pay A class is talked in the 26 basis point area over Euribor.
  • The Wolverhampton & Dudley Breweries pub transaction tightened its price talk for some tranches, with the fixed-rate single-A rated A2 class tranche now in the 78 to 80 basis point range over Libor.
  • The single-A rated fixed-rate A3 tranche has tightened to 83 basis points over gilts, down from the initial guidance in the low 80 basis point area over gilts.

Statistics:

  • New issuance volumes in July totaled 12.6 billion euros.
  • The market average for new issuance volumes during the first half of the year was 22.8 billion euros.
  • The total number of tenants in the properties included in the Deco 2005-EU1 deal is 1,618, with a 91% concentration in Germany and 9% in Switzerland.
  • The price guidance for the fast-pay A class notes is in the 19 basis point area over Euribor.
  • The slow-pay A class is talked in the 26 basis point area over Euribor.
  • The fixed-rate single-A rated A2 class tranche is now in the 78 to 80 basis point range over Libor.

Sources:

  • Asset Securitization Report
  • SourceMedia, Inc.

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