ABS

Vivint Solar is back in the ABS market, preparing a new deal two months after it was announced that it would merge with rival solar finance firm Sunrun.

Banque PSA Finance is set to pre-place most of its €692.1m Spanish Auto Loans 2020-1 deal with official institutions, with Santander arranging the transaction.

Santander priced its €520m full-cap stack significant risk transfer (SRT) deal auto deal, Santander Consumer Spain Auto 2020-1 on Wednesday.

More niche asset classes will make their securitization market debut in coming years as online and tech-focused companies pour into the capital markets to access new sources of financing, said ABS market participants speaking at Global ABS 2020 on Thursday.

Auto ABS players are looking cautiously at the recent recovery in liquidity, spreads and used car values, particularly as various government support schemes roll off in Europe and the US, said panellists speaking during day two of Global ABS 2020.

InSite Wireless Group has priced a $164m securitization, with its senior bonds achieving the lowest yield for a cell tower securitization this year. Sources have bemoaned rapidly tightening spreads across all sectors, ranging from cell tower to prime auto ABS, posing a challenge for investors looking for yield in securitization.

GlobalCapital and Afme convened a virtual roundtable to tackle the biggest issues facing securitization as the pandemic crisis continues. While other capital markets and the wider economy are reeling from the economic fallout stemming from Covid-19, European securitization is undergoing a regulatory rejuvenation, as the European Commission turns towards structured products as a solution to the coming wave of NPLs. Meanwhile, the market for synthetic ABS is being given a second look to help free bank balance sheets across Europe and spur lending to the real economy. Over the summer, the market saw the report from the senior forum on the Capital Markets Union, which included a number of recommendations on regulatory adjustments to improve the functioning of securitization in Europe. More recently the European Commission put forward a capital markets economic recovery package including measures related to securitization. The Commission has proposed extending the STS framework to synthetic securitizations or on-balance-sheet securitizations. The Commission has also put forward proposals to remove regulatory obstacles to the securitization of NPLs including changes to the regulatory capital treatment.

Several lenders have raised funding for the UK’s coronavirus loan scheme for SMEs through the securitization market, with Barclays emerging as the leading bank for the asset class.

The private student loan ABS sector exceeded 2019 issuance volume last week, with the addition of SoFi’s fourth transaction, as more borrowers rush to refinance their student loans while rates remain at historic lows.