The volume of securitization tranches that have earned the label of Prime Collateralised Securities (PCS) has topped €100 billion ($127 billion), according to a release from the eponymous organization.

But the volume of outstanding structured deals in the region keeps falling from its 2009 peak.

The PCS brand is designed for European structured deals that meet specified criteria, including a clear link to the real economy, for instance as a funding mechanism for loans to small and medium companies.

Started in 2012, the initiative sprang from an effort to get securitization in key sectors restarted in Europe and to set certain asset classes apart from sub-prime mortgages as well as structured products with a dubious relationship to economic growth.  

The PCS initiative said that the label is now affixed to 67 deals, that, by volume, account for 20% of the current value of only investor-placed, outstanding European securitizations, including those issued before PCS came on the scene. The share rises to 25% when the pool only includes transactions that, on the face of it, are PCS-eligible.

The outstanding volume of deals sold to investors as well as those retained by originators was a combined €1.85 trillion, as calculated by the Securities Industry and Financial Markets Association (SIFMA).

Only senior tranches of a securitization are eligible for the PCS label.

Over the last year, a growing chorus of policymakers and regulators in Europe has been voicing support for high quality securitization as a way to spur economic growth.

 

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