Lowest yield for RCI as ABS investors feel the squeeze
Accustomed to years of triple-digit spreads, ABS investors now face a squeezed spread environment. Just how squeezed it has become was made clear this week by the latest auto ABS from RCI Banque, which priced a €700m deal at its tightest ever spread since the financial crisis — and its lowest ever all-in yield, writes Joe McDevitt.
The deal was priced in line with market expectations and earned an enthusiastic response, but bankers said the hunt for yield would continue to push investor demand away from the prime space and down the credit curve. Mezzanine notes, for example, are attracting more interest than before.
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