I write this week just as the clouds roll into London after a week so hot it makes you wonder if there’s any point in going all the way to Barcelona for a conference. However, for the European ABS market, the sun is well and truly still shining. Here comes the pre-Barcelona rush.  

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Two deals priced in Euros this week (one Auto, one Consumer ABS), while it looks like LendInvest/JP Morgan’s UK buy-to-let RMBS

Pierpoint will make it three for the week in total by the time Friday’s out.

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Red & Black Auto Germany 12, from SocGen/BDK (Bank Deutsches Kraftfahrzeuggewerbe) was priced on Wednesday after yet more aggressive tightening, following the trend of recent weeks.  

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As the folks at Concept ABS wrote, starting with pretty cautious IPTs before grinding significantly tighter is becoming a common strategy at the moment, and we saw this with the other Euros deal too – Santander’s Spanish Consumer ABS, Santander Consumo 8.  

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For Santander, the marketed class B-Ds came in impressively, as the deal table below shows – a solid 50+bps of tightening on the €52.5m Class Bs!  

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As for Red & Black, I think they’ve ended up exactly as expected with the AAAs at 59bps over 1-month Euribor – 3bps wider than BMW’s Bavarian Sky from April 29, and 3bps tighter than RCI Banque’s Cars Alliance trade from April 30.  

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In addition to the two (soon to become three) deals that have sailed through this week, there are already four other deals in the pipeline, with more surely to come.  

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Vida Bank, formerly Belmont Green, is marketing its first UK RMBS with a full banking license. Known since 2017 for its Tower Bridge Funding shelf, we now have London Bridge, in a portfolio mix of BTL (68.87% of the pool) and owner-occupied (31.13%) mortgages.  

Sure, it’s technically a debut deal. But I’d still expect a strong result here.  

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There’s another Spanish consumer deal, this time from BBVA. And from Italy, there’s a new Stellantis Auto ABS – that’s the owners of Jeep, Fiat, Peugeot, Citroen, Alfa Romeo and many more, to laymen like me.  

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Vantage’s Data Center deal is clearly the standout for next week though. Expect IPTs to come on Monday, and pricing back end of next week.  

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A lot of people looking at that Vantage trade might be wondering why the two tranches on offer are both fixed-rate, as was the case for the single £600m tranche for their UK deal last May. And it’s the US influence coming through once again.  

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Obviously, Vantage are well-known issuers in the US – where securitized bonds are almost always fixed-rate. Here, it feels like a way to encourage the American bid – or shall I say, bids from US firms with an office in Europe.  

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And ultimately, it’s a new asset class, and as of now, they’re the only issuers in that asset class. So, sticking cautiously to what you know is probably wise. Although, it will be interesting to see if third time’s a charm when the next one comes along. Perhaps we’ll save that discussion for 2026.

Elsewhere, Georges Duponcheele of Munich Re alerted me to this report and jokingly said there’s not a single formula in the paper. But I must confess this section was supposed to go in last week (Sorry Georges).

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I reckon the absence of formulae suggests that it’s yet another example of how many market participants are seeking out political figures as their key audience, thanks to the European Commission’s upcoming reforms.

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But I digress, the report was jointly written by Duponcheele and a stellar cast of contributors – Ian Bell (PCS), Michael Bennett (Arch Insurance), Tamar Joulia-Paris (IACPM), and Veronique Ormezzano (VYGE Consulting). It’s titled: Strengthening Financial Stability

through Insurance-based Credit Risk Transfer.  

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It provides excellent background on the key arguments in insurance around risk transfer, with a fair bit of myth busting, and it helpfully breaks down the nuances between the US, EU and UK’s different approaches.  

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The report is published on the International Association of Credit Portfolio Managers (IACPM) website – here.

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Final Word

This weekend, I shall attend a rite of passage for every man – my first stag-do (or bachelor party, to my American readers). It feels like the opening gambit to a few years of weddings in my life, and the cost, hassle and travel is already starting to grate on me.  

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I myself got engaged in March this year (can’t believe I spent that much money on a small, shiny rock), and with no Arsenal or golf worth discussing (I had a bad weekend), I thought I’d tell you how my CEO nearly inadvertently ruined the whole proposal.  

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So for context, I am incapable of keeping secrets. I love to gossip… And when you buy an engagement ring, they have to go and make it, and I have to wait patiently for 6+ weeks before telling the one person that I really want to tell secrets to.  

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Naturally then, to let the burning desire to tell someone out of my system, I told a couple of colleagues, including the CEO of ARC Risk Group, Oliver Howard. I picked up the engagement ring on the Thursday, and was due to propose Friday evening at home, before going out for a nice dinner.  

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While working at home Thursday afternoon, I was sat next to the soon-to-be Mrs. Lemmon.  

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Then, I received a message from Oliver. It popped up on screen “Is tomorrow the big day?” at the precise moment when her gaze met my computer.  

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“Big day…” she asked. My face turned white. In a panic, I just went “I’m not telling you.” Trying to save time for a suitable lie to take shape in my head.  

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“Is it golf,” she asked.  

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That’ll do, I thought. “Yeah… I’m getting some new clubs.”  

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“Why wouldn’t you tell me that, honey?”  

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“They’re reeaaally expensive, and I’m going out tomorrow morning to get fitted for them.”  

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To my amazement, it worked. She fell for it. Only now, I had to leave the house at 7am to go to the golf club and pretend to be buying a new set, before starting work.  

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As I left the next day, she was still half-asleep. As I crept out of the bedroom she said, “How funny is it that I thought you were going to propose.”  

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“Oh no, we’re a long way from that,” I replied jokingly, nervously, relieved the plan seemed to be working.  

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While at the range, she called me and immediately starting shouting down the phone about me not tidying up after myself. Never have I been so glad to hear her angry, for this tirade meant she had 100% fallen for the golf shtick.  

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Later that day, I duly proposed. Well, in fact I panicked, didn’t say anything and rather shoved the ring in her face… to which she said yes.  

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Enjoy your weekend

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Tom

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