European market volatility has led some issuers to walk away from issuing European structured finance transactions, according to Fitch Ratings.
The trend, Fitch said in a report, might persist through the end of 2011.
Overall issuance fell to €45 billion ($60.8 billion) in 3Q11, providing a telltale sign that the markets are retreating from securitization in danger areas and focusing instead on RMBS and ABS deals from countries that have been relatively unscathed by the European crisis, according to Fitch.
"While issuance trends thus far in 2012 largely emulate those seen in 2010, ongoing problems surrounding Greece are raising doubts as to how issuance will finish out the year," analysts said in the report. "Also muddying the outlook is the potential spill over into Italy and Spain, two countries that have historically accounted for a sizeable portion of total new issuance in EMEA."
As a result, the rating agency said its original forecast of €100 billion of publicly placed issues now looks overly optimistic but 2011 levels of €93 billion remains within reach.