The securitization market is still making the case for sterling despite the strengthening euro fundamentals that have increasingly led corporate borrowers to Euroland. But despite a decline in sterling- based corporate borrowing, sterling- based ABS paper still maintains its appeal to a broadening investor base, said industry sources.
From a credit perspective, the market is perennially open to longer dated fixed-term ABS, said one analyst. Historically, sterling paper has dominated the longer end, but as the euro market matures, corporates led by improving long-term fundamentals are increasingly tuning to the euro markets as a cheaper alternative. "As far as corporates go, the reason you may have seen a decline in sterling paper is because they have a wider range of markets to issue in," said one industry trader. "But on the securitization side, the euro market for 10-year plus fixed issuance [still] tends to be a thinner market."