Supply at risk as TLTROs could reduce incentives for bank SME ABS to ‘zero’

By Tom Porter
24 Jul 2014

The way borrowing allowances are calculated under the European Central Bank’s latest funding programme may put ABS at a further disadvantage to covered bonds, according to Bank of America Merrill Lynch analysts, who are concerned their recently lowered 2014 securitization supply forecast should be cut again as a result.

BAML’s structured finance team slashed their full year forecast from €120bn-€140bn to just €90bn earlier this month — still at the bullish end of analyst estimates — citing the forthcoming targeted long-term refinancing operations (TLTROs) as one of the key factors behind the decision.

The TLTROs, announced by ECB ...

Already a subscriber?

Continue reading this article

Try full access to GlobalCapital

Free trial