KBRA releases research on the issuance dynamics of the European securitisation market. Q3 2024 steadily continued on the back of the strong pace set during 1H 2024 for European securitisation markets. An expected summer break failed to materialise as the market kept up a regular pace of issuance, already resulting in the strongest post-global financial crisis (GFC) year for newly circulated transactions. Volumes are up across a number of sectors, including broadly syndicated loan collateralised loan obligations (CLO), residential mortgage-backed securities (RMBS), consumer asset-backed securities (ABS), and auto ABS transactions. The pipeline appears to be continuing as we head towards year-end, but Q4 may be lighter than historical norms, given the strength of the year so far. Retained volumes remain muted, but several transactions are still issued and held for liquidity purposes. Further, as more commentaries come out in favour of change for securitisation regulations, there remains a positive tailwind to the market going into 2025.
Key Takeaways
- Newly circulated transaction volumes continue at a record post-GFC pace with EUR117.8 billion of European securitisation transactions sold to investors in the first nine months (9M) of 2024. This is already more issuance than any full year since 2007.
- RMBS, CLO, as well as auto and consumer ABS volumes have led the investor-placed market, with some specific segments showing strong growth. Consumer ABS volumes and buy-to-let collateral have more than doubled compared to 9M 2023. Italian lending has been at the core of collateral growth with volumes from the region tripling versus the prior year.
- CLO volumes continue to set a strong new issuance pace, but Q3 reset activity has been the major focus with the second-largest quarterly reset volume in the past five years. So far, volumes have reached a total of EUR35.3 billion in new transactions and EUR16 billion in resets, as well as EUR1.3 billion in refinancings. While the arbitrage opportunity could diminish, the market remains on pace for a very strong year.
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Related Publications
- Navigating European CLO Tail Risk: Mind the Amortisation Gap
- European CLOs: Too Big to Hold?
- UK Mortgage and Housing Trends: May 2024 Update
- KBRA's European Securitisation Survey: Positive Sentiment Grows
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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