Barclays Trims Forecast for Public European ABS Issuance

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Analysts at Barclays forecast a total of €46 billion ($61 billion) in publicly-placed European securitization issuance for 2013, according to their mid-year outlook.

They estimated that there was €17.5 billion of publicly-placed deals during the first five months of the year. Issuance totaled €54.5 billion during that period, with the bulk being retained by originators, most likely for the purposes of repo funding with the European Central Bank.

Barclays has revised down its predictions for publicly-placed issuance as conditions remain inimical to the asset-backed sector. (See table below)

The most dramatic drop in expectations has been from the U.K. RMBS sector, which has had its strength sapped by the Bank of England’s Funding for Lending Scheme FLS), a more attractive alternative for banks than securitization. Between the FLS’ launch in August 2012 and May 2013, only two U.K. RMBS have surfaced. Since then, three have come to market, although one was in June and thereby falls outside the scope Barclay’s report.

Barclays analysts said auto ABS in Europe has dominated public issuance so far this year.  

The analysts said they expected the U.K’s second-tier societies that may not be able to capitalize on the cheaper rates offered by the FLS to tap securitization in what remains of the year. But the lack of RMBS issuance in the U.K. has stimulated demand in some other asset classes, as investors look for product elsewhere, according to Barclay’s analysts.

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