Despite the primary markets somewhat opening and previously retained offerings being placed in 2010, the overhang of retained securitized debt stayed significant, according to the quarterly report, according to a report from the Association for Financial Markets in Europe (AFME) and the European Securitization Forum (ESF).
The report said that as of the end of the second quarter, the groups estimated that around €958 billion of securitized products remain retained by the respective originators. This accounts for close to half of all European outstanding.
Securitized products worth €31.6 billion of were issued in Europe over 2Q10, which is less than half of the first quarter issuance.
However, the report said that 57% of all issuances by amount in 2Q10 were publicly and privately placed, increasing from 19% in 1Q10, which might indicate the primary markets opening. Net issuance, according to the groups, is still negative as retiring issues have started to outpace new issuance and outstanding balances have started to shrink this year.
In the U.S., the report said that the market is still dominated by agency issuance, with little to no volumes in all sectors excepting ABS.
Proposed Securities and Exchange Commission revisions to Regulation AB, Federal Deposit Insurance Corp. Safe Harbor extensions, as well as the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 will probably continue to hamper issuance for the rest of 2010.
The last three Term ABS Loan Facility or TALF auctions were held for financing new CMBS with no bids, the report said.
The AFME /ESF data report is a quarterly report that consolidates both U.S. and European data for the securitization markets in terms of issuance activity; deal sizes; outstanding balances;
rating changes; credit spread changes; index data; ABCP issuance; as well as highlights and commentary.