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Securitisation Data Report: Q2 2016
21 Jul 2016
Market Highlights and Commentary Market Environment Economic conditions According to Eurostat, GDP rose by 0.3% quarter-over-quarter(QoQ) in the Euro zone (EU19) and by 0.4% in the EU28 duringthe second quarter of 2016. The unemployment rate stood at10.1% (EU19) and 8.6% (EU28) as of the end of June 2016, thelowest rate recorded since 2011 (EU19) and 2009 (EU28). Term Issuance and Outstanding Volumes In Q2 2016, EUR 74.5 billion of securitised product was issued inEurope, an increase of 31.0% from Q1 2016 (EUR 56.9 billion) andan increase of 49.2% from Q2 2015 (EUR 49.9 billion). Of the EUR74.5 billion issued, EUR 29.1 billion was placed, representing39.0% of issuance, compared to EUR 14.3 billion placed in Q12016 (representing 25.2%) and EUR 28.4 billion placed in Q22015 (representing 56.8%). For the second quarter, UK RMBS continued to lead placed totals(EUR 11.6 billion), followed by German auto (EUR 4.6 billion) andEuropean CLO (EUR 4.6 billion). Notably, the first peer-to-peer /marketplace lending securitisation appeared in Europe, a UK SMEdeal comprised of loans funded through the Funding Circleplatform. Net issuance was positive for the first time since the third quarterof 2014, with EUR 1.271 outstanding at the end of 2Q’16, up fromEUR 1.267 trillion at the end of 1Q’16. Of this, approximately EUR733.7 billion, or 57.7%, was retained. Credit Quality In Europe, upgrades outpaced downgrades in Q2 2016 amongEuropean securitised product, with upgrades concentrated inEuropean CLOs and prime RMBS. ABCP Trends European asset backed commercial paper (ABCP) issuance wasEUR 120.1 billion in Q2 2016, an increase of 25.3% QoQ and 16.7% YoY. Multiseller conduits continue to dominate as thelargest category of issuer in the ABCP market, particularly fromIreland and France. European ABCP outstandings decreasedslightly from the previous quarter, ending the second quarter atEUR 15.3 billion, down by 14.7% from EUR 17.9 billion in Q12016.
European High Yield and Leveraged Loan Report: European Leveraged Finance - Q1 2016
17 Jun 2016
Issuance highlights European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 1Q’16 to €22.6 billion, a 12.0% decrease from €25.6 billion quarter-over-quarter (q-o-q) and a 62.5% decrease from €60.1 billion in 1Q’15. The quarterly decrease stems from the large fall in high yield bonds issuance, which decreased by 24.1% in the first quarter of 2016 while leveraged loan issuance increased by 2.9%; the high yield bond share of the leveraged finance market decreased to 47.3%, down from 54.9% in 4Q’15 and down from 62.8% in 1Q’15. Market and economic environment According to the April 2016 European Central Bank lending survey, in the first quarter of 2016, improving loan supply conditions for enterprises and the continued increase in loan demand across all loan categories suggested an ongoing recovery in loan growth. The net easing on credit standards for loans to enterprises in 1Q’16 was stronger than the historical average calculated over the period since the start of the survey in 2003. Competition remained the main factor behind the net easing of credit standards on loans to enterprises while risk perceptions and banks’ reduced cost of funds contributed only marginally to such easing. Across firm size, credit standards were eased more strongly for loans to large firms than to small and medium-sized enterprises. For the large euro area countries, credit standards on loans to enterprises eased in Italy and Germany, while remaining unchanged in Spain and the Netherlands and continuing to tighten in France in net terms. Credit standards on housing loans tightened and remained below the historical average since 2003. The net tightening was largely driven by the implementation of the EU mortgage credit directive and by a net tightening impact of banks’ risk tolerance. Looking ahead to the second quarter of 2016, euro banks expect a further net easing in standards on loans to enterprises and consumer credit but continued net tightening of standards for housing loans. Net demand increased for all types of loans in 1Q’16 and banks forecasted a further net increase in the demand for loans in the second quarter.
European High Yield and Leveraged Loan Report: European Leveraged Finance - Q4 2015
14 Mar 2016
Issuance European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 4Q’15 to €25.6 billion, a 13.3% decrease from €29.6 billion quarter-over-quarter (q-o-q) and a 5.4% decrease from €27.1 billion in 4Q’14. The quarterly decrease stems from the large fall in leveraged loan issuance, which decreased by 30.0% in the fourth quarter of 2015 while high yield bonds issuance increased by 8.0%; the high yield share of the leveraged finance market increased to 54.9%, up from 44.1% in 3Q’15. In full year 2015, European leveraged finance issuance decreased to €171.1 billion, down 16.8% from €205.7 billion in 2014. Leveraged loan issuance decreased by 20.9% to €75.7 billion in 2015 from €95.6 billion in 2014, while high yield bond issuance decreased by 13.4% to €95.4 billion in 2015 from €110.1 billion in 2014./ Market and Economic Environment According to the January 2016 European Central Bank lending survey, in the fourth quarter of 2015, credit standards on loans to enterprises eased further as those on housing loans returned to a net easing, continuing to support the recovery in loan growth. In 4Q’15, euro area banks reported a further net easing of credit standards on loans to enterprises for the seventh consecutive quarter, driven in particular by banks’ competition, while risk perceptions contributed only marginally to such easing. Looking ahead to the first quarter of 2016, euro banks expect a further net easing in standards on loans to enterprises, broadly unchanged standards for housing loans and a return to a net easing for consumer credit. Across firm sizes, credit standards eased more strongly on loans to small and medium-sized enterprises (SMEs) than on loans to large firms. For the large euro area countries, credit standards on loans to enterprises continued to ease considerably in Italy and remained unchanged in the other countries, with the exception of France where they continued to tighten in net terms. Net demand for loans to enterprises continued to increase in 4Q’15, mostly due to the low general level of interest rates. Net loan demand by enterprises increased to 27% in 4Q’15, up from 16% in the previous quarter. Banks reported a net increase in the demand for housing loans and consumer credit as well. The net loan demand for housing loans was 29%, slightly lower than 33% in 3Q’15 while net demand for consumer credit increased to 21% in 4Q’15 from 19% in 3Q’15.
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