Barclays’ European securitization team’s pitch stood out, in a very strong field, to everyone on the GlobalCapital editorial team for the bank’s breadth of services, commitment to ESG, and continued innovation as uncertainty reigned throughout the capital markets in 2022.
It was clear from the start of 2022 that the year would challenge the European securitization market more than a bumper 2021 that had been fuelled by cheap central bank funding schemes. But if the shift away from years of low interest rates and low inflation was already inevitable, the shock was intensified by Russia’s invasion of Ukraine in February.
Amid all this, Barclays was able to carry out over £4bn of new lending within its securitized products business, execute some of the largest deals in the primary European securitization markets and facilitate innovative solutions for clients — just when they needed it most.
The “full front-to-back solution”, as Matt Weir, managing director and head of European securitized products calls it, allowed Barclays to provide a range of options for its clients. Moreover, the securitized products business is not siloed, and the culture is one of collaboration.
Michael Nartey, head of European securitized products solutions agrees.
“We've never tried to be all things to all people all of the time, but the things that we want to do, we do well,” he says.
Barclays said in December 2022 that it would facilitate $1tr of sustainable and transition financing by the end of 2030 across the entire bank, and the securitization team’s dedication to ESG is clear.
Public ESG transactions have been hard to come by in European securitization, but the tide is turning, driven by activity in the private markets. Indeed, in July 2022 Spanish solar firm Perfecta Energia worked with Barclays to close the first European solar ABS warehouse. The bank also provided $150m of a $300m commitment to support finance Swedish electric freight company Einride’s first major debt raise, the largest financing for electric heavy-duty vehicles to date.
However, Barclays’ work with UK energy regulator Ofgem was perhaps the jewel in the crown. Weir calls it one of his “favourite trades ever”.
As the UK was hit hard by the sharp rise in energy prices, it led to 29 energy providers going bust in 2022. Many of the largest providers had already signed up to be Suppliers of Last Resort (SoLRs), taking on customers whose energy provider had been unable to serve them. However, payments for providing energy to those new customers, known as Last Resort Supply Payment (LRSP) claims, were made over 12 months.
With energy providers already stretched, Barclays worked with Ofgem to provide an £810m solution through a receivables financing structure that the SoLRs can use as their LRSP claims come through. Receiving the payments up front helped create additional liquidity in the UK energy sector as it came under severe stress.
“It's hard to quantify the deal’s impact precisely, but it’s approximately £1 per household that is not on UK consumers’ energy bills this year,” says Gordon Beck, Barclays’ head of corporate and sustainable securitization. “It was one of the most complex transactions that anyone who worked on it will be involved in in their careers.”
Meanwhile, Barclays’ success in the public markets was led by Ed Ballin, head of ABS syndicate. In 2022, Barclays registered its biggest year leading ABS primary issuance since 2008, heading up the RMBS league tables with around 17% of market share and taking 12% of CLO new issues too.
Ballin says that being part of the largest deals, like the £6.4bn refinancing of the 2017 Ripon Mortgages UK RMBS, was “a product of a lot of the financing and lending we do behind the scenes”.