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Well, it seems the European ABS gods have shone on me this week, even if the footballing ones did not for my beloved Arsenal. Three deals pricing in midweek with no manic rush to print on Friday means that despite forgetting it was a bank holiday and that as you read this, I’m enjoying an extra day off to play golf, this week’s Freshly Squeezed hasn’t really missed anything. Although, the late arrival on Thursday of Vantage’s second European Data Centre ABS did threaten to throw a spanner in the works.  

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We’ll come to Vantage in a second (and probably more next week), for this week is all about the successful return of UK RMBS paper.  

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Just 9 months after Paratus AMC’s mixed buy-to-let (BTL) and owner-occupied shelf, Braccan, made its debut, it has successfully returned and proved the strength of demand for UK RMBS. The deal has upsized from its initial £440m to £550m, inclusive of pre-funding, and priced the AAAs at 84bps over Sonia, exactly where it was in the debut deal back in September.  

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On a side note, one of the things I truly adore about European ABS is the creativity with which shelves are named, and it’s so nice to see Paratus continuing that tradition with Braccan. The name comes from the Bronze Age (the year 942 AD, to be precise), as Braccan Heal was the original name for the UK town we now know as Bracknell. According to Wikipedia, it means “nook of land belonging to a man called Bracca”, which also happens to be where Paratus is headquartered.  

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Meanwhile, Pepper Money’s £340m second lien UK RMBS, Castell 2025-1 also priced this week and ended up rather comfortably inside 100bps on the seniors at 97bps. I think that gives some rather good perspective on just how strong demand is at the moment.  

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For context, the last three Castell deals (from 2022 and 2023, twice) were all pricing the AAAs between 135-140bps over Sonia, and all three were pre-placed.

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As a friend said to me this week, both Castell and Braccan have aggressively tested appetite for non-prime UK paper and been rewarded. Going forward, the next batch of UK issuers are likely to push investors even harder.  

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Ultimately, the last few weeks suggest that the market has found a level for the risk. It’s roughly 5-10bps wider than the tights of early 2025, but that’s no major problem.  

Looking Ahead

Obviously, Vantage’s second European Data Center deal is on the way, but that’s not expected to price until week beginning May 19th.  

Backed by two data centers in Frankfurt and two in Berlin, the deal size is €720m, with €80m not offered. Vantage has also gone for the Green Bond label under the ICMA Green Bond Principles.  

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With Vantage’s extensive experience in the US market, and the rarity value this sort of transaction can supply, one would expect it to go well in a couple of weeks’ time.  

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Aside from that, next week has two Euro deals in the pipeline. First up, the well-known auto ABS shelf from BDK/SocGen, Red & Black Germany is back. And Santander’s Spanish consumer ABS keeps us ticking along.  

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I’m increasingly getting the sense that sellers won’t be rushed in the run-up to Global ABS. While it seems the market is getting to a point of what you might call volatility apathy, where big news events hit with such regularity that the market is almost numb to it, there is still going to be less supply than originally expected.

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In part, that’s due to a bit of earlier macro-noise, but it’s also due to lower origination volumes, and some players leaving the market. Braccan was just the second UK BTL RMBS of the year, for example, while a player like Belmont Green (now Vida Bank), is naturally less reliant on the RMBS market with a banking license.  

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And as we’ve discussed, it’s only serving to further tip the balance in the issuer’s favour. I can’t imagine much better times to try and issue (all things considered), but you probably had to make that call a month ago at least.

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Final Word

So, fresh from having my heart ripped out in Paris… Feels quite similar to last season’s defeat versus Bayern Munich. My feeling is we need more dynamic attacking options to compete at the very top. And, it’s pretty clear that given the backing with transfers, Mikel Arteta is building one of the most formidable teams in Europe. In Arsene Mikel We Trust.

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Anyway (I can’t face thinking about Arsenal), last week I wrote about being all mindful at golf. This past weekend, however, I got bashed up in a fourball better-ball match and screamed a few expletives at the top of my lungs on the 9th hole.  

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If you had read last week’s newsletter (here), you might be mistaken for thinking I’m this sage-like character on the golf course. Sadly, this is not true.

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Golf can make my competitive instincts worse, as in many cases, I’m only playing against myself – where I can be my own worst enemy, filled with unsustainable self-criticism.  

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I suppose this is why the idea of enjoying whatever hobby you do is so important. It is not to protect you from ever getting wound up, but as a way to ground you and remind you afterwards that this is not the most important aspect of your life.  

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Tiger Woods talks about his “10-step rule”, where he can be as angry as he likes after a poor shot. But after his tenth step, it’s over and forgotten about, and he must re-focus. Easy to do I suppose when you’re the greatest golfer who ever lived. I think I might need a few more steps.

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Anyway, by the time you’ll be reading this, I will likely be enjoying a round at Sudbury GC (my home course) – as part of a golf society. I’ve played a lot of courses in Middlesex/West London now, and I can honestly say that I think it’s the best course around.  

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Hit me up if you want an excuse to “network” this summer.  

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And just lastly, sign up to the mailing list, it will make me feel better after Paris. Click here to sign up

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Cheers

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Tom

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