European ABS investors showed strong support for increased issuance in the ABS public market, according to a survey published today by Bishopsfield Capital Investors.
The firm surveyed 26 investment managers and advisors within the European ABS market and found that investors are not as cautious about new public issuance as certain issuers and arranging banks.
The survey found that 62% of respondents expected levels of issuance to be higher in the next 12 months than they were during the past year, while 80% believe that new issues will achieve stable or tightened credit spreads, the survey results indicated.
The confidence expressed by investors suggests a return to pricing last seen before the collapse of Lehman Brothers, with the spread range on triple-A European RMBS tightening from 350-650 bps to 120-280 bps during the past year, according to the study.
Most survey respondents indicated that they do not see the need for a U.S. style Term Asset Lending Facility (TALF) program to boost the European ABS market, further reflecting their confidence.
Only a minority of survey respondents indicated a preference for fresh new issuance, while many investors would consider the relative value among existing issuance, the survey suggested.
European investors are also decreasing their dependence on ratings, placing additional emphasis on their own credit analysis, results showed.
Bishopsfield Capital Partners, based in London, provides arranging, structuring, and advising services for European structured finance transactions and investment partnerships.