Commercial mortgage-backed deals, ones from Germany and synthetic offerings, are seen as the top growth areas in Europe for the coming year, according to a poll of conference attendees. Nobody should expect a synthetic CMBS transaction out of Germany, however, jested Michael Raynes, co-head of securitization at Deutsche Bank in London.
CMBS should grow across Europe as real estate lenders turn to the capital markets, noted Peter Kappel, managing director at Calyon. And while Germany has historically contributed a meagre pool of assets for securitization relative to its economic clout in Europe, it is at a stage in its economic cycle to provide more collateral for new bond sales, noted Societe Generale's Jean-Francois Despoux, head of securitization.
As for spreads, supply and demand are overwhelmingly seen as the most important factor in determining spreads, with the poll showing market participants believe these factors are more important than movements in the corporate bond market and interest rates. Nonetheless, Philippe Tromp, managing director at Financial Security Assurance in London, who expects spreads to widen, thinks this will be triggered by a widening in corporates.
