Global ABS 2019 Day One
With new regulatory frameworks in place for securitization in Europe comes another bout of uncertainty for the trajectory of the market. The stunted issuance pipeline in the first half of this year and the delay of the regulatory technical standards (RTS) for STS securitization have driven a jump in attendance at this year’s Global ABS conference, drawing 4,100 registrations ahead of the event.
Quirks of Europe’s new Securitisation Regulation, which came into force this year and is dominating debate at this year’s IMN/Afme Global ABS conference in Barcelona, could leave CLO buyers carrying the can for failures of CLO managers to meet their regulatory obligations.
European securitization investors are increasingly on the hunt for more esoteric cash flows, but a lack of supply means that buyers are going to need to get creative with how they source allocations, said speakers on a panel on day one of Global ABS.
Angelo, Gordon & Co has hired former Pimco portfolio manager Sunil Kothari as managing director, responsible for originating and executing on residential and consumer debt investments across Europe.
The Securitisation Regulation came into force in January but there is still room for market participants to influence the details of the rules – and the European Commission is still receptive to feedback, if only the industry will “raise its voice”, said Alexandre Linden of BNP Paribas.
Thank you very much for inviting me to this roundtable, and for the opportunity to give kick off with some thoughts and observations. I took some time to think about what I would say today, and decided to google the latest news in the area.
When GlobalCapital and Afme came together for this year’s annual securitisation roundtable, the topics were similar to last year – but the tone was much more positive. Nationwide’s pioneering Sonia-linked deal showed the sterling market that investors would buy the new benchmark, and Afme invited the building society’s secured funding head, Krishan Hirani, to share his thoughts and lessons from the deal. Since the discussion in mid-May, the transition has only accelerated, to the point where, as the market meets in Barcelona, it’s unlikely to see a sterling consumer issue without a Sonia coupon. The new Securitisation Regulation, which came in early this year, has been far from trouble-free – but some of the biggest problems with the rules were solved, and many issuers have already adopted the “Simple Transparent and Standardised” designation. Christian Moor, senior policy advisor at the European Banking Authority, was also able to join us, and offer his thoughts on the future of the market. Further out, we discussed the potential for securitisation, as the market with the closest connection to underlying assets, to help drive the sustainable finance agenda forwards. If that happens, securitisation will have completed the transition from villain to hero – and next year’s roundtable, and Global ABS 2020, should be more positive still.
Publisher: Oliver Hawkins
Telephone: +44(0)20 7779 7304
Commercial director of events: Daniel Elton
Telephone: +44 (0)20 7779 7305
Publisher, special projects: Ashley Hofmann
Telephone: +44 (0)20 7779 8740