9/1/2025
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The summer holidays are well and truly over in ABS as the market sprang to life last week.
Four deals were priced but no less than seven trades remain in the pipeline, with all of them aiming to price this week in what looks set to be the busiest of the year so far.
Euro deals are dominating affairs with three out of the four priced deals coming from the continent and six out of the remaining seven also in euros. As expected in the early September rush, the asset classes are all what one might call classic European ABS – prime autos, alongside a smattering of RMBS and Consumer paper.
The big question ahead though is whether investor indigestion becomes a real concern.
Consider the typical trade timeline: Issuer begins marketing on Monday, gets IPTs out on Wednesday and aims to be done by Thursday or Friday of that same week.
This time, it’s notable that seven issuers have hit screens with the intention of pricing the following week, giving investors the weekend and a few extra days to do the necessary diligence work before pricing.
Indeed, only one deal of the 11 looking to restart the market this Autumn has managed to price the same week it hit screens.
But of course, extra time means extra execution risk. At this time of year, it’s not unusual, particularly with people only just coming back to work. However, it’s a sign that the biggest risk issuers see right now is getting lost in the volume.
The seven issuers are Volkswagen, BBVA, auxmoney [this is not a typo], Stellantis, Agos, Selina Finance, and Credit Immobilier.
But now, to the early movers: Bank11, SocGen, Charter Court and RCI Banque, who all priced deals this week.
It’s hard to believe its been six weeks since the last pre-summer holiday deals of BofA’s Taurus and Multilease Swiss’ First Mobility auto trade. As deal flow began drying up, we were looking at some of the tightest spreads seen in the market since Covid, and we appear to have picked straight back up from there.
Bank11’s €500m RevoCar 2025-2 was priced first on Thursday and brought with it some impressive book-building across the capital stack. The AAA-rated class A’s accounted for €464m but still managed to get to 2.2 times covered, while the significantly smaller B, C and D tranches were 5.5x, 8x, and 8.7x covered, respectively.
Unsurprisingly, this allowed Bank11 to pull investors tighter. IPTs on the class A’s began in the mid-high 50s, but finished at 51bps over 1-month Euribor – the tightest ever print for RevoCar. The deal was initially set to be €400m, but with such demand, a further €100m was chucked into the pot.
Last week, we said that Bank11 was beginning to establish itself as a more consistent force in European Autos, and they’ve set a strong pace for the rest of the market to follow this September.
Hot on their heels was SocGen with its €734.5m Red & Black Auto Loans France 2025.
Unlike RevoCar’s somewhat unusual multi-tranche Auto ABS, SocGen had €650m of AAA paper to sell. They began with surprisingly high IPTs of low-mid 60s and approximately €550m on offer, but the plan clearly worked as strong demand led to a €100m upsize and the books continued to build well above €1bn.
SocGen eventually settled at 56bps over 1-month Euribor with the AAAs 2.4 times covered. 56bps means it was priced right on top of the 2024 edition. No mean feat when you’re looking to get rid of €650m in August.
Just before the close of play on Friday, RCI Banque’s €770m Auto ABS, Cars Alliance Auto Leases France V 2025-1 managed to price in line with Red & Black and upsize by over €200m.
Their tactics looked identical to Red & Black, and the result is identical too, with the AAAs landing on 56bps over 1-month Euribor. The bumper deal takes the total of euro-denominated AAA notes sold this week to a whopping €1.8bn.
All three issuers will be sleeping easy while the chaos unfolds in September, safe in the knowledge that cutting short their Summer has paid off.
Despite some fits and starts, the UK market has struggled to get going this year and remains a very long way off matching 2024 volumes. Year-to-date, sterling issuance stands at €17.4bn (equivalent), just under €20bn shy of the 2024 full-year record of €36.5bn.
In fairness to the UK, this hasn’t been one of those years where a few huge legacy books come along to distort the figures, and there have been added complications in the UK auto market with the Court of Appeal’s judgment on car finance deals with brokers. But on the flip side, we have seen some interesting innovations in the Equity Release space.
Nevertheless, investors are hungry for sterling paper. Enter Charter Court to bring its sixth prime RMBS deal since 2017, the £578.5m CMF 2025-1.
Just the £527.9m AAA-rated Class A’s were on offer, and £277.9m of that was retained by the issuer. So, effectively, there was £250m for investors to get stuck into.
Charter Court came out with rather bold IPTs of mid-high 50s, but with so little competition for so long, they were able to pull investors in regardless. Books finished 2.6 times covered and were priced at 52bps over Sonia. With just £250m to play with, investors didn’t have much wiggle room to play hardball.
52bps also makes it Charter Court’s best result since 2018. The early bird catches the worm.
I find it very unlikely that we will be here next week with the same seven deals only to talk about. If anything, the last week would have provided ample evidence that coming now, even if a few investors are too busy to play, will lead to a satisfactory conclusion.
Finally, for those of you wondering why there is so little Arsenal-related quips, you’ll be shocked to learn that I have no interest in talking about football or Arsenal this week. Instead, I shall enter a two-week period of mourning until they win again.
That’s all from me. I would like to direct non-subscribers to the sign-up link below. We’ve made it much simpler – just chuck in your name and work email, and it’ll be straight into your inbox every Monday.
Have a great week
Tom
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