Barcelona shindig arrives at critical moment for securitization
Annual Global ABS conference hasn’t mattered so much since the the fallout of the GFC
Next week the world of securitization gathers in Barcelona at a crucial moment for the market. The conference has not mattered so much since the end of the noughties, when the market was beginning to shape its post-GFC existence.
Not only has remote working made conferences more important than ever, vis-a-vis networking, but this year's conference also comes at a crucial crossroads for the market. As central bank funding rolls off, forcing banks to look for alternative funding options, advocates of securitization sense an opportunity to push regulators to rethink the rules governing the much maligned sector.
Optimists would like the incremental approach to deregulation to be cast aside in favour of more radical changes that would encourage new investors into the market. While that is unlikely, a clearer picture of exactly what market participants hope is possible will become clear at the event.
Either way the issuer base is set to be reshaped and that matters to everyone involved. Understanding what other players are thinking will be vital, particularly when participants feel more remote from each other than ever before.
The Covid-19 pandemic remoulded working habits, facilitating a pivot away from face to face meetings and towards online meetings.
Zoom for example, a previously obscure company, first became world famous and then even the verb that replaced the word meet. The very word 'meet' felt inappropriate at the time: online meetings are simply not as rich as in person contact and lack the substance to properly nurture new relationships. Global ABS on the other hand offers a rare opportunity to actually meet the full, international spread of colleagues, collaborators and competitors — all in the convenience of one, albeit very large, room.
European securitization itself, like every capital markets community, relies heavily on interpersonal relationships. Veterans of the market have told GlobalCapital that work in the sector has a tendancy to be like the Hotel California, "you can check out anytime you want, but you can never leave".
Next week in Barcelona offers the perfect opportunity to build a reputation. Investors need to trust issuers to call deals, issuers need to rely on investors to keep buying their deals even as big issuers return, and the host of intermediaries and deal facilitators in attendance will relish the opportunity to get to know their clients.
Barcelona itself is of course an incredibly attractive destination and not somewhere many attendees are going to be reluctant to visit. But putting the tapas and the sangria aside, this year's event offers a once in a generation opportunity for a market in flux, and attendees should be sure to live it up as best they can.