Asset Backed Securities

Headlines have painted a nervous picture of the health of consumers across Europe. Simultaneously, rating agencies have upgraded their outlook on the same consumer assets to neutral. The short story is that, although there has been a mild weakening in performance metrics, the consumer has held up well and is ahead of our base case expectations in almost all areas.

Elena Rinaldi, Portfolio Management, wraps up the second quarter of 2024 for the Asset-Backed Securities (ABS) team. She notes that while financial markets experienced mixed performance and broader volatility, the ABS market remained relatively resilient and delivered strong performance.

Securitisation made its latest appearance in the mainstream financial press this week with the news that the European commercial mortgage-backed security (CMBS) market is set to experience its first losses on AAA bonds since the global financial crisis.

In the first week of June, the European asset-backed securities (ABS) market participants flocked to sunny Barcelona for the 28th Global ABS conference.

The term ‘fossil fuel financing’ refers to the provision of capital (including loans, investments, and other forms of capital) to companies involved in the exploration, extraction and production of coal, oil and natural gas.

Douglas Charleston, Partner & Portfolio Management, concludes the first quarter in 2024 for the Asset-Backed Securities team, noting that while major economies remain resilient, the rates markets have undergone significant shifts, with central banks reassessing their rate cut expectations.

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Elena Rinaldi (Portfolio Management), provided a comprehensive understanding of the key aspects and trends within the European CLO market.

Despite the cost-of-living crisis and inflation crunch on consumers, they have proven exceptionally hardy, with their financial health remaining remarkably strong during a very difficult period.

Much like the European market, Australian ABS has started 2024 with considerable momentum, with over AU$12bn in issuance year-to-date and a significant pipeline building. But how are its green credentials?

Last year was a volatile year for global markets but also one where economies performed better than expected. If we look at the leveraged loan market, last year was characterised by a surge in so-called amend and extend (A&E).

Income has returned. After a couple of barren years, yields in high-quality bonds that were not too long ago returning just 2% or 3% are now set to bring in 7% to 8%. And this jump in yields looks to be a game changer for investors.

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Douglas Charleston, (Partner, Co-Head of ABS) provided a comprehensive understanding of the key aspects and trends within the European RMBS market.