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HBOS, the UK's largest residential mortgage lender, this week launched the biggest ever European mortgage securitisation (MBS) with a £3.5bn equivalent blowout deal that set new pricing benchmarks for European MBS. As bankers across Europe hurried to complete transactions before next week's ABS conference in Barcelona, joint bookrunners Barclays Capital, JP Morgan and Citigroup/SSSB catapulted the jumbo MBS into the market, the first issue from a new master trust.

KBC Bank and HSBC this week closed a Eu1.3bn managed synthetic collateralised debt obligation for KBC Financial Products. The deal is KBC Financial Products' first managed CDO, and provides investors with exposure to a managed portfolio of credit default swaps referenced to mostly US investment grade corporate bonds and loans.

Fin-Eco Leasing, a division of Bipop-Carire and Italy's fourth largest leasing group, last week (Friday) priced a Eu1.76bn securitisation of real estate, auto and equipment leases, the largest to date in the European market. Lead managed by Morgan Stanley and jointly lead managed by Mediocredito Centrale, the deal completes a quarter of heavy issuance in the sector that saw spreads widen in both the primary and secondary market.

Consumer bank Finconsumo Banca, a repeat issuer in the ABS market, will next month add its own twist to Italian securitisation with a wholly synthetic package of consumer loans. Rather than selling the assets to an SPV, the bank will gain regulatory capital relief through three credit default swaps with Crédit Agricole Indosuez (CAI) for the entirety of the Eu350m portfolio.

European ABS investors will be offered a new asset class later this year when AIG-MezzVest, a European mezzanine fund, launches its first securitisation. The Eu350m deal will parcel mezzanine loans made by the fund to support buy-outs and refinancings in a range of industries. However, the pool is less diverse than a conventional arbitrage collateralised debt obligation (CDO), so that investors will have to rely more heavily on the skills of the asset manager.

WesBank, the auto loan division of FirstRand Bank, last week closed a R2bn ($199.5m) partially-funded synthetic securitisation, transferring the senior risk to a portfolio of auto loans. Lead managed by Rand Merchant Bank, the deal is the second synthetic transaction to emerge from South Africa since the country's 1992 securitisation law was updated last year to allow synthetic and partially-funded securitisations. Shortly before the new legislation was passed the South African Reserve Bank raised capital adequacy requirements for banks from 8% to 10%, giving bank originators an added incentive to securitise.

WestLB and CIBC World Markets will next week launch the long awaited refinancing for boxclever, the UK consumer goods rental company. Boxclever was formed in June 2000 from the merger of Granada Home Technology and Radio Rentals, the two UK market leaders in renting equipment, mainly televisions and video recorders, to consumers.

Standard Corporate and Merchant Bank (SCMB), a division of Standard Bank Group, will break new ground in the South African ABS market this month, launching what is believed to be the country's first asset backed commercial paper conduit. It is the first bank to take advantage of an amendment to the securitisation law last December.

The Spanish securitisation market gathered pace this week as two banks launched packages of loans to small and medium sized enterprises (pymes) under the Kingdom of Spain's securitisation programme. Each year the government guarantees Eu1.8bn of pyme securitisation tranches to encourage bank lending to the sector. Six deals have already reached the market in the first two quarters, and a Eu600m deal for Caja de Ahorros del Mediterraneo is expected to be the last offering in the asset class this year.

Citigroup/SSB expects to price a $519m securitisation today (Friday) for US insurance company American International Group (AIG). The deal parcels loans made by AIG subsidiaries to the company's customers, enabling them to spread their insurance premium payments over a year.

Deutsche Bank returned to the European collateralised loan obligation market this week with a Eu3bn synthetic balance sheet deal that met with strong investor demand in a quiet sector. Deutsche last came to this market in December 2000 with the Eu2.5bn CAST 2000-2, part of a recognised and successful programme from the bank. Other series include CORE, Globe and Blue Stripe.

Adelphia Communications and Tyco International remain the top two names in the secondary market this week as investors try to anticipate what's next for the troubled companies. More than $40-50 million of Adelphia's Century Cable facility changed hands in the 78-81 range after its operating-company Century Communications filed for bankruptcy this week. "People are trying to find out where the right levels are now that its moved into distressed," said one dealer concerning the trades. Calls to the company's spokeswoman were not returned by press time.