5/5/2026
Good morning, I hope you had a lovely long-weekend. We’ve got something of a double offering for you this weekend as the latest episode of the Freshly Squeezed Podcast is now live!
It’s certainly not one to miss as we spent time discussing compliance and technology within ABS, in light of a number of recent scandals. We had two experts in the field of governance and compliance in Joe Lau, President of US-based asset manager LordCap and Luca Primerano, CEO of ARC Comply, a compliance tech company.
It’s fascinating to me how this has become such a hot topic, because in all my years of reporting it would definitely be considered an area where editors would tell you “no one wants to read about that”!
Listen below to Fraud, Failures & Fixes: The New Reality for ABS or click here for more information.
And as for primary market ABS, it’s been another solid week with two offered deals going well in the form of two autos, RCI Banque’s €1bn Cars Alliance Germany V 2026-1, and a UK auto from Stellantis – the £475m E-CARAT UK 2026-1, that was last seen back in 2022.
Both of these deals helped continue the mini-rebound we’ve seen in autos since Mercedes’ Silver Arrow proved that for the more liquid auto paper, investor appetite is still there.
Cars Alliance had truly stonking demand on its triple-A’s, with €1.19bn of unfulfilled demand. Then for Stellantis, another sign that the UK auto market is beginning to step up after a few difficult years. Their coverage wasn’t quite as strong at the top of the stack, but it still tightened from IPTs, while the mezz was on fire – setting post-GFC record low marks at the triple-B and double-B ratings.
So all in, good news for the ABS market? Well, sort of. I was looking through the Concept ABS database, and there’s a slight concern for the more esoteric issuers and asset classes. We’ve heard that during the height of the crisis deals were pulled, and it would make sense if those were predominantly at the funkier end of the ABS spectrum.
Primary issuance typically goes through a similar “dance” each year with the leading, vanilla names getting the market off to a good start before the esoteric assets come to play.
But so far this year, there have been just 11 deals that were not CLOs, Auto ABS, Prime or BTL RMBS. One to watch as hopefully the confidence from recent autos spreads.
Almost exactly a year after its last German auto ABS, RCI Banque has returned with yet another from the Cars Alliance brand. However, the current deal is unique in that it is the first placed German lease deal from RCI Banque – all previously sold German transactions featuring loans.
In the intervening time, the market has grinded tighter and tighter before wobbling as significant Q1 supply (combined with fears over Iran and energy prices) saw investors take a considered breather. But in recent weeks, demand has returned to the auto ABS market with a number of deals getting away well, led by Mercedes' benchmark German auto, Silver Arrow... click here to read the full overview on Concept ABS.
The wild volatility in broader financial markets when the US-Israel-Iran conflict began is certainly not on display anymore. But oil has risen once again above $110bbl and the Strait of Hormuz is still under blockade. Add in a record Q1 of €6bn auto supply and further €1bn already in Q2 and its little wonder that auto issuers were recently forced to offer as much as 10bps more than they may have planned for before March.
But RCI Banque leads will have been bolstered by seeing Mercedes, Bank11 and Swiss lender Multilease AG all do well in the past fortnight in Euro-denominated autos. Regardless, the leads for Cars Alliance needed to be careful given post credit crunch record Euro auto ABS primary supply for the first four months of the year (indeed, VW stepped into the ring during the marketing process with the 48th deal from its benchmark VCL programme).
Furthermore, this was the first time the Cars Alliance Germany brand was offering leases (as opposed to loans). With that in mind, IPTs were tempting to say the least at 70a, offering a 15bps pickup versus the recent RevoCar from Bank11 on its E700m Class A's...click here to read the full market context on Concept ABS.
That’s all from me this week. Boy, it’s getting exciting in the football… But I shall keep the silence that has served me well so far!
With Global ABS not far away now it’s probably a good time to mention that we will be there of course, so if you want to chat over a coffee or a drink or some food, please do get in touch. I may also be speaking on a panel… but that is yet to be confirmed!
Have a great week,
Tom
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