KBRA UK (KBRA) releases a research report examining the European securitisation market in second-quarter 2022.
European securitisation primary markets typically head into the annual June industry conference with positive tailwinds to build some momentum ahead of the summer slowdown. This year, the broader market disruption has slowed the new issuance pipeline to a crawl. Transactions are still happening, but the investor predictions highlighted in KBRA's recent industry survey appear to be materialising.
Second-quarter 2022 saw a modest start as issuers were still bringing transactions to market, while investor interest remained constructive. With the strong start to 2022, year-to-date issuance numbers for transactions remained above year-over-year (YoY) levels until May. However, the overall slowdown in transactions has meant a drop to below 2021 trends, but still remains well above the pace in 2020 and even 2019. European securitisation distributed a total of EUR69.6 billion to investors, while EUR41.7 billion was issued and retained up to end-June.
The investor market totalled EUR18.8 billion of newly issued transaction volumes in Q1 2022, as well as EUR0.4 billion in resets, and EUR0.1 billion reissued.
Key Takeaways
- Newly circulated issuance (excluding refinancing, reset, reissuance, and retentions) in the second quarter reached EUR18.8 billion. When taking into account the EUR17.7 billion of retained transactions, market issuance grand total of EUR36.9 billion in Q2 2022.
- In Q2 2022, broadly syndicated loan collateralised loan obligation (BSL CLO) new issuance was EUR4 billion. As the rate and spread environment changed, issuance of resets and refinancings in Q2 dropped to virtually nothing, with only one transaction reset. This is in stark contrast to the nearly EUR14 billion reset in Q2 2021 and EUR7.8 billion of newly circulated issuance.
- RMBS transactions remain a large part of issuance sold to investors in Q2 2022. Collateral was widely distributed across mortgage types with EUR2.6 billion in prime RMBS, followed by EUR1.1 billion in buy-to-let RMBS, EUR0.4 billion in non-conforming RMBS, EUR0.7 billion in re-performing RMBS, and EUR0.4 billion in second lien.
Click here to view the report.
Related Publications
- KBRA's European Securitisation Survey Reveals Market Concerns
- European Securitisation: Strong Start to 2022 Despite Headwinds
- The European Securitisation Market in Q4 2021: Strong Finish to the Year
- European Structured Finance 2022 Sector Outlook: Challenges on the Horizon?
About KBRA
KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA's ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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Contacts:
Gordon Kerr, Head of European Research
+44 20 8148 1020
gordon.kerr@kbra.com
Business Development Contacts
Mauricio Noé, Co-Head of Europe
+44 20 8148 1010
mauricio.noe@kbra.com
Miten Amin, Managing Director
+44 20 8148 1002
miten.amin@kbra.com
