2/16/2026
European ABS continued its solid start to the year with three hefty trades priced to total just shy of €3bn placed last week. But there was also some interesting movement on the regulatory front as the European Parliament published its proposed amendments to the Commission’s reforms of securitization.
Any MEPs in the Economic and Monetary Affairs Committee of the European Parliament (ECON) are able to chuck in whatever amendments they see fit, before further haggling and negotiations take place between the EU Commission and Council. This should eventually lead to a vote in Parliament and a rather dignified, unified process to approve the final text – in theory.
However, understanding what’s actually going on at this point in the process is incredibly difficult as the document becomes almost indecipherable, such are the multitude of notes and additions – not all of which will gain traction with the remaining MEPs.
It’s a bit like being asked to mark a student’s essay when five other students have scribbled all over it.
Indeed, PCS’ newsflash alerting readers to the document said this:
“They are also, literally, amendments to amendments to amendments and so difficult to interpret unless you have all the documents in the chain open at the same time. To add to the opacity, the amendments are in the names of individual MEPs so, unless you are familiar with the political groups in the Parliament, you will struggle to identify the positions of the different parties and different member states. In other words, unless you have been following this process in great detail, you may wish to give this a miss. You have been warned.”
So, I did what all people in 2026 do when things are hard – I made ChatGPT do it.
I used the “Pro” version of ChatGPT 5.2 and it “thought” for nearly 2 hours. Below is a short summary of what it believes were the major amendments tabled.
The idea behind publishing this is not to be lazy, but to say that at this early stage it can be quite hard to decipher what the “direction of travel” is. I doubt anyone will have yet had the time to go through all the documents so, hopefully, at the very least, this will provide a useful guide for you, dear reader.
Scroll to the final section to read what ChatGPT has to say, I must do my duty to the deals first!
It’s hard to know where to start with BBVA’s €2.3bn monster Consumer ABS, BBVA Consumer 2026-1, for there are just so many impressive points to note.
We could talk about how unfulfilled demand hit €1.9bn or how it has set a new record for the tightest prints across the mezzanine for Spanish Consumer ABS, or that it was the first Consumer ABS in euros in 2026.
And we could start at the coverage across the offered mezzanine tranches, which were 5.2x, 5.6x, 8.1x, 3.3x and 4.8x from Class B, D, E, F and the unrated Z reserve fund, respectively.
If it wasn’t clear already, BBVA Consumer 2026-1 confirms that it’s about as seller-friendly a market as you can possibly get. If you’ve got a trade in the works, don’t delay. Don’t think about investor capacity. Just get out there!
Meanwhile, there was a French RMBS from BPCE's relatively new master trust, the €909m Olympia Master Home Loans 2026-1.
Prime RMBS has been a key beneficiary of the market reopening in euros. And with ING’s Dutch Green Lion on the table just days earlier, it helped create a very obvious read-through for the next high-quality European mortgage credit.
So timing was good for BPCE, and launching at a level slightly wider than the inaugural Olympia print back in October 2025 while being materially wide of the Dutch green trade created room to tighten without appearing stingy.
The leads then executed textbook bookbuilding. Early momentum, visible coverage growth, controlled guidance compression, and a meaningful upsize that didn’t derail demand.
Last but not least came yet another UK Auto trade looking to make up for lost time after a difficult 18 months with a court case hanging over the sector. It is now the ninth sterling trade of the year, a far-cry from the disappointing Q1 back in 2025.
The technical backdrop was therefore supportive, perhaps even forgiving. Accounts are cash-heavy and keen to put money to work after a thin 2025, but they’re also being asked to digest a notably busy pipeline. Add in a colourful list of macro distraction, and leads have had to tread carefully.
Books built steadily rather than spectacularly at 1.0x and 2.0x initially, then 1.4x/3.5x before final coverage landed at 1.4x and 4.4x, respectively. That proved enough for an assertive pricing outcome, particularly in the mezz, where the final level marked the tightest double-A UK auto print since 2018.
This week is already gearing up to be busy with a UK Lease ABS from Propel Finance, a UK Data Centre trade from Yondr, and the German Auto ABS, Pony 2026-1.
ChatGPT did the usual caveats that none of this is set in stone, but it said there were a few clear themes appearing, which it called “Directions of Travel”. Here is its full, clean answer:
The Big Direction of Travel in the Securitization Framework
Direction 1: “Make private securitization actually workable again”
A very strong theme in the amendments is reducing the compliance cost and data-sharing friction that currently makes EU securitization hard to execute — especially for private or bilateral deals.
You can see this in three linked moves:
• Narrowing what counts as “public” securitization, so fewer transactions are pulled into the heavier public disclosure regime.
• Moving away from rigid, template-driven disclosure requirements, particularly for private transactions.
• Strengthening confidentiality protections, ensuring private deal data held in securitization repositories is not broadly accessible beyond supervisory purposes.
The clear objective is to reduce unnecessary administrative burden while maintaining regulatory oversight.
Direction 2: “Shift transparency from market-wide disclosure to supervisory reporting”
Several amendments suggest a clearer split between public and private transactions:
• Public securitizations: More standardised disclosure, making them easier for a broad investor base to analyse and compare.
• Private securitizations: Reporting primarily aimed at supervisors and systemic risk monitoring, using simplified templates rather than full loan-level, investor-facing data.
This represents a meaningful philosophical shift. The emphasis is that supervisors need consistent data for oversight, but sophisticated private investors can negotiate the information they require contractually. It reduces duplication while preserving systemic transparency.
Direction 3: “Open the door wider to non-EU securitizations”
Another visible trend is making it easier for EU investors to buy third-country securitizations without requiring non-EU issuers to replicate EU reporting templates word-for-word. The amendments promote a “substantively equivalent information” concept.
In practice, EU investors would verify that non-EU disclosure is equivalent in substance — not identical in format.This signals a push toward a broader investable universe and a deeper investor base, even where disclosure formats differ from EU templates.
Direction 4: “Capital relief and incentives remain central”
Although much of the debate focuses on disclosure and structure, the real economic driver sits in the parallel CRR amendments.
The broader reform package aims to make high-quality securitizations — especially senior, STS and potentially “resilient” tranches — less capital-intensive for banks.
There is significant debate over calibration, but the direction is clear: better align capital with perceived risk.This matters because capital treatment drives behaviour. If capital becomes cheaper for certain securitizations, issuance activity typically increases.
End of ChatGPT
So to summarize, ChatGPT believes that the amendments are generally trying to make securitization easier to execute, especially on the private side, and want to really ramp-up the ability to issue your prime/STS asset classes.
It marries up well with the latest podcast episode I recorded with Rob Koning, who was surprised at the EU Parliament’s willingness to go further than the Commission. There are of course some voices guarding against that, but my sense is that they are the less powerful or numerous MEPs.
You can listen to the podcast here.
And with so much to chew over, that’s all from me this week.
Thanks,
Tom
© 2026 ARC Risk Models Limited
