Europe has led the charge in structured synthetic issuance over the past year although global volumes in the structures are down on last year. David Tesher, managing director at Standard & Poor's in New York, explained that in the year to Oct. 31 the ratings agency saw 190 rated synthetic deals come to market in Europe, compared with 43 in the U.S. and 33 in Asia. Of this number, however, 101 deals in Europe consisted of single tranches of less than USD20 million and in the U.S. the number includes 28 single tranche deals, he said. Synthetic volumes for this year so far stand at USD28.15 billion, compared with USD47.84 billion for last year.
One bright spot, however, is synthetic deals referencing asset-backed securities, with 43 deals so far coming this year, compared with only two in last year, Tesher said. Again Europe accounts for the bulk of the product growth with 41 of the deals hitting the market in the continent.
Moody's Investors Service saw a similar trend, rating 154 CDOs in Europe during the first half of the year compared with 83 in the same period last year. The average size of the rated tranches fell to EUR18 billion (USD19.7 billion) from EUR43 billion the year before (DW, 8/24).
