Banks continue to dedicate more resources to the securitisation business, but there is a sense that the industry is reaching a new stage in its development. In place of the all-out growth of earlier years, it is becoming more important for both the buy and sell sides to distinguish between the different segments of the asset class.
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CMBS conduits are all the craze this year, riding on the strong increase in issuance levels last year and the booming property sector. The main European commercial banks are setting up their own conduits to make full use of what they see as unlimited business opportunities in the region. But valuations are high and risks of mispricing even greater, as Jean-Marc Poilpre reports.
The European non-conforming RMBS sector finally looks set to expand from the UK to mainland Europe. There has already been German issuance, and the Netherlands could well follow next year, with Spain on its heels and Italian and Polish issues also in sight. William Thornhill reports.
Despite a rapid increase in the number of new entrants into the cash and synthetic CDO space in both Europe and the US, investors still make very little differentiation between managers. Though the credit environment remains benign for now, the risks are clearly skewed towards a prospective credit curve steepening, a phenomenon that should help separate the wheat from the chaff. William Thornhill reports.
With public expenditure needs growing and an increasing amount of pressure being brought on EU countries to reduce their budget deficits, more governmental entities were expected to take advantage of off-balance sheet financing opportunities. However, a lack of regulatory clarity over de-recognition and performance issues around a number of deals mean that question marks remain over the growth prospects for the sector. A decision over the summer from Eurostat could throw another spanner in the works, as Alec Mattinson and Paul Farrow report.
The ABS market has been something of an enigma this year, with supply falling but interest broadening. The result has been very tight spread levels, with each subsequent securitisation pricing tighter than the last. Investors and analysts expect a break in this one-sided market behaviour, but perhaps not until Q4 as issuance increases. John D’Antona reports.
The collateralised debt and loan markets are experiencing tremendous growth as investors look to enter amid shrinking yields in competing asset classes. With arbitrage opportunities increasingly more challenging, the pace of new manager entrants could soon slacken. John D’Antona reports.
From January 1 2007 the Basel II framework for banking supervision will oblige all European banks to adopt significant changes in their securitisation strategies, as both issuers of and investors in asset-backed securities. Andrew Cavenagh reports.
The double whammy of tight liquidity conditions and the issue of the Reserve Bank of India’s new guidelines in February have drained the Indian securitisation issuance pipeline, and volumes have slumped to a trickle. ABS pros are struggling to rise above the current depressed mood, but it will need considerable reworking of the market mindset to get things going. Shankar Ramakrishnan reports.
Over the past two years, Standard Chartered First Bank has established itself as Korea’s best cross-border securitisation issuer. It is probably one of the most important securitisers in Asia and its deals attract widespread interest from investors in Asia and Europe. Albert Ross reports.
Harbourmaster Capital Management (HCM) is a well-established, active European leverage loan manager specialising in low risk, low volatility senior secured assets. With seven deals under management, €4.5bn invested in leverage loans and the ground-breaking pro-rata transaction under its belt, it is without doubt a manager to look out for. William Thornhill reports.
The automobile sector, while full of pitfalls for domestic issuers, who have chosen to place more loans via private conduits and balance sheet funding, has been a cash cow for foreign captive issuers such as Nissan. John D’Antona reports on how the automaker has been able to not only tap the ABS markets, but also complete a deal in just one minute.