Securitisation

With a macro backdrop of falling rates and solid global growth, TwentyFour Asset Management's Eoin Walsh says fixed income investors can expect healthy total returns in 2025.

Within the European ABS landscape, Volkswagen Leasing has solidified its role as a benchmark issuer under the Volkswagen Compartment Leasing (VCL) platform. Volkswagen uses this platform – with over 25 years of history – to finance standard German auto loans. It is probably one of the least exciting platforms but also one of the most liquid ABS investments you can buy.

The tightening of monetary policy has given rise to concerns about the health of mortgage markets due to higher interest rates , leading to questions about the expected resilience of residential mortgage-backed securities (RMBS).

After a horrible year for financial markets in 2022, the macro-outlook for 2023 had a lot of consensus views, with most predicting a much better year ahead, helped by supportive rate cuts from central banks and positive returns from both government bonds and credit.  

Last week Aza Teeuwen and our ABS team visited the Global ABS conference in Barcelona. One key discussion point in CLOs was around the lack of leveraged loan supply and the resultant sharp slowdown in the primary market

Last week saw three UK Prime RMBS deals served up to ABS investors, the most liquid part of the European ABS market. In our latest blog we hear from Douglas Charleston who analyses these recent deals and what it means for this market segment.

Given the current macro environment, Pauline Quirin believes loans with near term maturities provide a useful insight into where risk lie.

Douglas Charleston looks at the wider implications of recent bank sector volatility and the opportunities it presents for credit investors.

We can debate whether the European Central Bank is behind the curve or not, but Christine Lagarde says rates will be in non-negative territory by September.

With inflation and rate hikes dominating market discourse, we expect floating rate assets such as ABS and CLOs to benefit from increasing demand in 2022.

As we enter the New Year, we say goodbye to an old “friend” that has accompanied us (for better and for worse) since the inception of the UK ABS market in the late 1980s – Sterling LIBOR.

Eoin Walsh explains how bond investors can use the three dimensions of credit – amount, quality, duration – to help maximise or protect returns through different stages of the economic cycle.