S&P says the bond sale includes notes denominated in pounds and euros. Investors will be repaid with rental income from 140 tenants involving 330 leases from 16 commercial properties in Scotland, Yorkshire and northwest England. But there is only one loan backing the bond sale. The agency has assigned an expected triple-A rating to all three tranches of notes.

CMBS are the fastest growing bonds in Europe's securitization market this year, and analysts expect spreads to stay tight and offer higher returns than other types of paper. Their appeal lies in the ability of CMBS to give bond investors real estate exposure without the responsibility of owning buildings while providing property companies effective funding from the bond market. They can also give investors better yields than other investments available in the securitization market, especially residential mortgage backed bonds. CMBS maturity can run for 30 years, much longer than the five- to seven-year average life of a European RMBS. Fixed rate CMBS is particularly attractive to investors who want longer bonds to match their long-term liability.

In the first half of 2005, CMBS made up more than 20% of the new bonds sold in the European securitization market, five times the market share they had in the same six months period a year ago, according to data provider Dealogic. According to Lehman Brothers data, the triple-A, 15-year UK CMBS spread was 53 over gilts on June 29, compared with a triple-A five-year UK prime RMBS spread of 11.5 basis points over Euribor.

RMBS issues still account for the overwhelming majority of new bonds sold in securitizations. But the market share also slid to 76% in the first half of this year, from 87.5% a year ago.