Belgian RMBS has returned to the market after an absence of over a decade.
Creafin restarted the market with its eponymously named Creafin 2026-1 deal, which priced last week.
The deal isn’t just a repeat of the old Belgium RMBS market of prime bank-led RMBS deals, as it is backed by a mix of owner-occupied and buy-to-let loans to prime, near-prime and non-conforming borrowers.
Loans using a ‘5/5/5’ interest rate structure, which differs from the Belgian mortgage market’s standard fixed interest rate structures, also back the deal.
Tom Hall gets into the structural features of Creafin’s deal, notably the interest rate swap structure used to tailor this RMBS deal to Creafin’s unique offering.
That was not the only esoteric deal that was priced last week, as KKR priced the first public European buy now, pay later ABS deal and Enpal priced the third European renewables ABS transaction, the second backed by loans for solar panels and heat pumps.
This has led to slower execution times, with Creafin, KKR and Enpal all out in the market for nine working days.
While it is normal for esoteric deals to take longer to execute than mainstream asset classes, execution times were still longer for regular issuers. Together took eight working days to price its first lien non-conforming RMBS, compared to the five working days deals were executed in at the start of the year.
Investors could be getting a break from the colossal supply of the last five weeks, as only sponsor Waterfall’s sterling second lien RMBS and sponsor KKR’s German multifamily CMBS are marketing this week.
Meanwhile, Thomas Hopkins discusses the conspicuous absence of tiering in European CLO liability pricing.
Tiering has been expected for some time, particularly as investors have become more concerned about credit selection in the wake of the Iran War.
Nonetheless, the gap between the spreads that new and experienced managers can achieve remains small, as collateral overlap persists in the European CLO market.