Barclays warns ABS mezzanine may not jump

By Tom Porter
04 Dec 2014

European ABS bankers believe the success of the European Central Bank’s ABS purchase programme (ABSPP) in improving real economy lending is all down to whether its actions will stimulate sales of mezzanine bonds to free up bank capital. But Barclays’ analysts were not holding their breath this week.

Securitization professionals argue European banks are capital constrained rather than funding constrained, and that ABS transactions have to again offer originators risk transfer through the placement of mezzanine bonds, in order to compete with cheaper forms of capital market funding such as covered bonds.

The ECB has stated ...

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