Consultant Zone

Securitisations – alive and kicking

The recent positive news that a UK specialist lender has completed a £350m mortgage securitisation is a welcome fillip for the RMBS industry.  In a further boost, a separate transaction of £425m from a different lender followed within days. We understand both transactions were oversubscribed across the tranches, allowing the lenders to price senior notes competitively and attracted several new investors.

No one is suggesting that the securitisation market has become risk free, or that headwinds no longer exist, but the transactions show the market is alive and kicking. Securitisation markets across the globe have always been, and will always remain, volatile and sensitive to macroeconomic and regulatory shifts. 2021 has thrown up a variety of challenges. Traditional analysis shows the securitisation market in 2021 has seen shifts in the landscape in all headings; political (regulatory reset), economic (COVID reset), social (employment reset) and technological (drive for efficiency reset).   

The list of potential issues remains a long one. As always, where one investor sees risk, another sees opportunity. The challenge is identifying risks and taking the right steps to mitigate them. And that is where Rockstead can help. While our role is often simplified as checking stuff, we can do so much more than that. All our analysts are market professionals with many years’ experience; they do so much more than simply ticking boxes as their experience is brought to bear – they understand the context and implications of what they are reviewing. 

We are extremely positive about the marketplace; our strong work pipeline reinforces our view that originators and investors agree. Like most other market contributors, we were disappointed that Global ABS 2020 had to be cancelled, but it is great that ABS 2021 is back on. We are delighted to be a confirmed sponsor and look forward to face-to-face conversations in London 27/28 September. Whether an originating lender, funder or purchaser give us a call to see how we can help or come and meet us in September.