KBRA Releases Report: European Securitisation Continues Steady Growth

KBRA has published new research on the issuance trends within the European securitisation market. Despite expectations of a summer slowdown, Q3 2024 maintained the strong momentum set in the first half of the year, making this the strongest post-global financial crisis (GFC) year for newly issued transactions. Securitisation volumes increased across various sectors, including broadly syndicated loan collateralised loan obligations (CLOs), residential mortgage-backed securities (RMBS), consumer asset-backed securities (ABS), and auto ABS.

Looking ahead, the market remains active, with a robust pipeline anticipated for the remainder of the year, though Q4 issuance may be lighter than usual due to the strength of previous quarters. Retained volumes have stayed relatively low, but several transactions continue to be issued for liquidity purposes. Additionally, increasing calls for regulatory reforms are providing positive momentum for the market as it approaches 2025.

Key Takeaways:

European securitisation transaction volumes are at a post-GFC record pace, with EUR117.8 billion sold to investors in the first nine months of 2024, surpassing any full-year issuance since 2007.
RMBS, CLOs, and auto and consumer ABS have driven market growth, with consumer ABS volumes and buy-to-let collateral more than doubling compared to the same period in 2023. Italian lending has been a key contributor, with volumes tripling year-over-year.
CLO volumes have maintained strong issuance levels, with Q3 focusing heavily on resets, marking the second-largest quarterly reset volume in the past five years. To date, EUR35.3 billion in new CLO transactions, EUR16 billion in resets, and EUR1.3 billion in refinancings have been recorded.

While arbitrage opportunities may decrease, the market is on track for an exceptional year.

For more details, [click here to view the full report].

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