Survey: EU Managers Expect to Add to ABS Holdings

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A spring survey of European asset-backed portfolio managers by DBRS shows a vast majority expects to increase their securitization holdings in 2016.

In the polling, conducted last month, 79% stated they expected to raise their levels of investments this year – with 64% hedging that it would only be by “a little.”

But many see a “muted level” of new issuance in which to add securities, with respondents saying an average of €75 billion in investor-distributed issuance will hit the market this year. The survey shows most expect under €200 billion in total issuance, as well.

Both the forecasts are below DBRS’ forecast from the beginning of the year, which called for €85 billion of distributed issuance and €230 billion ot total issuance.

Nearly half – 43% –stated the lack of supply was a reason they couldn’t purchase more debts for securitization. However a majority of 69% stated there would be less than €80 billion of distributed issuance to come to the market.

Where do investors expect issuance to come from in the next 12 months? The majority think that RMBS and autos will be major areas of expansion, which, DBRS noted, is not particularly surprising.

However, "alternative" ABS and small and medium-sized enterprise collateralised loan obligations are expected to be large issuance sectors in the next 12 months, particularly from Italy, where Italian non-performing loan transactions are being considered. In RMBS, the U.K., Netherlands and Italy are expected to be areas of future issuance.

The survey was conducted with 165 securitization industry participants, a majority of whom invested across Europe or globally.

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