Asset-Backed Securities Quarterly Update – July 2024

Elena Rinaldi, Portfolio Management, wraps up the second quarter of 2024 for the Asset-Backed Securities (ABS) team. She notes that while financial markets experienced mixed performance and broader volatility, the ABS market remained relatively resilient and delivered strong performance.

Key takeaways: 

ABS market performance

• The ABS market was insulated from broader volatility and returned strong performance
• Primary issuance reached €77bn including €25bn in Collateralised Loan Obligations (CLOs), which marked the highest first-half issuance in Europe since the Global Financial Crisis
• Strong demand for ABS products due to attractive yields and low volatility 

Market outlook

• Slower activity expected over the summer but continued strength in supply and demand
• The ABS team continue to value flexibility and to favour AAA notes, short-dated bonds, and high coupon tranches