A rise in esoteric assets is expected for 2002, which signals that European ABS is healthy, says Moody's Investors Service in a report issued last week, but whilst ABS volumes are expected to be robust, numbers may not reach the record-breaking volumes of 2001.
According to the report, the European ABS market experienced a year-over-year growth rate of 126% year. Volumes rose to EURO42.1 billion in 2001 with the total number of European ABS transactions issued rising by more than 50% to 67 from the 44 seen in 2000. The increase is largely attributed to the number of jumbo transactions' (deals that surpass EURO1 billion) hosted last year that rose to 10 from the two seen in 2000.
The rise in esoteric assets is of particular interest, as it signals that issuers and investors are becoming more comfortable with unusual and innovative structures and will continue "to raise the profile of the market and increase the confidence of its participants."
Also contributing to volume last year were deals backed by non-performing loans, future receivables and auto loans and leases. Reported volumes did not include ABCP, CDO, CMBS, RMBS or whole-business securitizations.
According to Moody's, volumes in 2002 will also include a fair share of issues backed by the more standard asset classes, as well as an increase in repeat transactions and an increasing number of new issuers, which may contribute to new emerging structures.