3/30/2026
The clocks going forward is normally a sign that spring has sprung and the hibernating animals of the forest are slowly awaking from their months long slumber.
But the still rather wet and cold British weather remind me that real life and European ABS markets are not some Disney fairytale.
Indeed, it looks like the market is starting to hunker down for a week or two. Spreads are a few basis points wider, the geopolitical situation in the Middle East is certainly not helping, and deal flow is down to a trickle. And before we scream blue murder and blame it all on yo-yoing oil prices, the reality is there’s been a ton of supply and we’re now entering the Easter school holidays.
Many market participants are off to catch the last of the snow, big children are back from university and little children need childcare. And so, I would be very cautious on attributing anything so far solely on events in Iran and the wider Gulf region.
Last week, I was in Amsterdam for the Outvie Dutch Securitisation Conference (as the official “podcast partner”, no less). It was palpable to me how optimistic everyone present was.
Younger bankers could see real effort and attention was being put into the structured finance desks, while more established players understood that with reform on the horizon, the market was well-placed to attack 2026 and beyond.
Of course, this can change. Yemeni Houthis joining the Iran war or US troops on the ground potentially being one of them.
But, as one podcast guest said to me this week – there remains a “weak link” to those macroeconomic and geopolitical issues and a German borrower’s ability to pay their car loan on time, or a British homeowner’s ability to pay their mortgage.
Further evidence of that sentiment was seen in the only marketed trade of last week, Mediobanca’s €950m Italian consumer ABS, Quarzo Srl – 2026.
It’s easy to forget that the Quarzo deal brings another record for the euro ABS market Q1 issuance, as over €16bn has now been sold in 2026, excluding CLOs. Meanwhile, consumer ABS has contributed over €5bn to that total – a Q1 best for 18 years.
But with broader concerns over Iran, what was initially to be €450m of Class A paper offered with €150m in protected orders and the rest retained, became a minimum of €350m offered and €250m maximum of protection. Mid-80s IPTs was offering around 13bps pickup versus the recent Italian consumer Golden Bar.
The cautious IPTs were met with solid interest with books 1.2x covered and then 1.7x. It allowed the leads to pull in tighter to 82bps over 3-month Euribor and increase the marketed tranche to €500m with coverage landing at 1.9x, creating a surplus of €450m.
A clear sign that investors are still there, although at wider spreads and slightly lower volumes.
As for this week, with the long Easter weekend approaching, we’re in for a quiet few days. Few will be desperate to issue in the broader context, and the weeks following Easter are often more active. And as a result, the visible pipeline is empty.
That’s all from me this week, but before I go please do look out for the latest episode of the Freshly Squeezed Podcast coming this week. It’s jam-packed with guests from the Outvie conference, including Aegon, ABN Amro, MUFG, Rabobank and more!
We also have some very, very exciting news at ARC Analytics coming your way. I have been dreaming of the day I can share it with the wider world of ABS for many months now.
Aside from that, frequent readers will be delighted to know that my dog Chewie is back to full fitness after his surgery, evidenced by the fact that he knocked over his 18-month-old neighbour when she was a guest in our home on Saturday.
Have a great week,
Tom
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