Euro ABS issuers dodge swap costs in negative rate environment
European auto ABS issuers have been pushing up coupons and selling deals well over par as Euribor plunged, hoping their new deals can avoid the fate of older deals which are now trading effectively as fixed rate issues.
Syndicate bankers said that the coupons were initially raised to avoid creating a “distortion in the secondary market” whereby auto ABS bonds with a low coupon, such as 20bp, would essentially turn into a fixed rate coupon – albeit a fixed rate of 0% - which would then
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