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It’s late October, the clocks have just gone back, Halloween is tantalizingly close, and before long, Mariah Carey and Cliff Richard will emerge from their annual hibernations to serenade us with some questionable Christmas music.

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So, when seven deals are priced in European ABS including a few debuts, one immediately considers that a sign of a market in rude health. But with four of those transactions being either largely pre-placed or retained, it makes me wonder if things are not quite as rosy as they seem.

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Are investors beginning to hold off just a tad more?

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The euros market, while strong, is certainly not as exuberant as it was a month or so ago, and while the latest UK buy-to-let RMBS from Lendco priced a touch inside the recent Mortimer trade, I think it’s fair to say that a bit of widening feels inevitable.

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In all honesty, it’s probably about time too. Macro noises for some time have not been hugely positive yet spreads across Europe became about as tight as they could be – and stayed there for the best part of 12 months. Perhaps now, with the news of American ABS and private credit failures Tricolor and First Brands, investors will no longer take what their given so easily.

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Although, as far as Dutch equipment leasing debut issuer Beequip is concerned, things are looking sweet as honey after they managed an upsize and a fair bit of tightening in a strong opening salvo.

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Euro ABS primary is still seemingly running hot, with €90bn of issuance YTD smashing 2024’s FY record. Yet beneath the surface, the flow has been overwhelmingly auto-heavy, with €22bn of auto deals vs barely €500m of lease ABS this year. That probably played to Beequip’s favour as its €500m debut from the new Hive platform stood out as both a rarity and a test case for investor appetite beyond car finance.

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And while I’ve been prattling on about the collapses of Tricolor and First Brands causing a larger sense of caution, that was not the case here. Instead, Beequip’s team leaned into the uncertainty with generous IPTs, offering as much as 15bps over Hiltermann’s Hill FL 2025-1 at AAA and 40–50bps extra for the mezzanine. That bait worked. Books swelled from 1.3× / 3.0× / 4.2× / 3.3× to 1.9× / 5× / 7.2× / 4.8×, triggering tighter guidance and an upsize from €350m to the full €500m.

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Final pricing landed +10bps, +5bps, +10bps, +18bps down the cap stack versus Hill FL.

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To me, it’s proof that investors are willing to back new names if the story’s right and the spread’s appealing. In a year swamped with auto ABS, Beequip’s heavy-equipment leases were a welcome palate cleanser, offering yield and novelty. Overall, the debutant played it perfectly.

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They must be buzzing… Okay enough with the anthophila jokes I promise.

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As for the rest of this week’s fare, see below. I’ve added a helpful column on the pre-placement/retained deals too.

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Looking Ahead

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As for next week, there are four deals in the pipeline so far, two from Europe and two from the UK. While full cap stacks are on offer, both of the Euro trades have a pre-placed allocation already secured, suggesting that arranging banks want to reduce their execution risk.

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In Sterling, we see the return of two rather familiar names in Bavarian Sky and Polaris. UK auto is a rare beast these days and in fact, the last Bsky deal came nearly 18 months ago in May 2024. Let’s hope it’s a sign the sector is over the problems from the car finance mis-selling scandal.

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Meanwhile for Pepper, it’s been less than 4 months since its second Polaris of the year, but here we are again with a third for 2025. Unlike last time, there’s about 4% of BTL collateral in there alongside the owner-occupied mortgages.

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Final Word

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That’s it from me this week. Please also check out the latest podcast episode with Owain Chambers from Lenvi – really enjoyed this episode. Click here to listen.

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I have very few personal tales to tell this week as I spent the weekend looking and sounding like a stop smoking advert, and continue to do so. But in all seriousness, if anyone has any tips for how to stub it out permanently, I’m all ears!

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Have a great week

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Tom

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