12/22/2025
And so we come to the final edition of Freshly Squeezed in2025. I would like to say first of all that I’m incredibly grateful to all of the subscribers. It’s humbling to see how many people in the industry have signed up and continue to read the newsletter – I certainly didn’t predict it when this began in April, so thank you.
Before I get to the second part of the 2025 European ABS Report Card, there were two deals worth a mention. First, a €1bn Italian RMBS was retained by Banca del Mezzogiorno (BDM), and there was a publicly offered with heavy pre-marketing £443m UK CMBS from, you guessed it, Blackstone. It’s a last mile logistics portfolio consisting of 64 properties subdivided into 644 units with a valuation of £828.8m.
And we shall come to it at the end, but there are also a couple of regulatory reform bits I think everyone in European structured finance should read.
But let’s get to it. Part 2 will be taking an exclusive look at the year in terms of asset classes, courtesy of the Concept ABS database. I know I suggested looking at spreads, but in large part, the market has just found its level. AAA spreads on the big-hitters like UK Prime RMBS and German Auto haven’t drastically moved all year. Instead, they’ve remained constant in the 40-60bps over base rate bracket.
It speaks to the wealth of demand in the market for a solid 18 months now, and my recent conversations don’t suggest any changes yet.
Although, I would caution that 2026 could be a year where we start looking at the secondary market a bit more keenly for any signs of distress.
The traditional heavyweights of European securitization dominated 2025, as expected. CLOs once again led the way, while Auto and Consumer ABS had strong years. The RMBS markets, typically driven by UK issuance, were still strong but perhaps not quite at the level we’ve come to expect.
In large part, that is down to less issuance coming from the UK. Last week, we saw how the placed volumes in the UK were down about €7bnversus 2024, which explains how Consumer ABS managed to nick 3rd place from Prime RMBS.
A look at figure 2 shows year-on-year growth for the top 3, more euro-centric asset classes. While 4th-6th as more UK-centric, all suffered declines v 2024.
Encouragingly though, 2025 saw year-on-year growth in CMBS, Non-Standard Prime RMBS, and Lease ABS. All of those markets saw less than €2bn of issuance in 2024, but this time around, Lease ABS is just under that figure at €1.9bn, while both CMBS and Non-Standard Prime are in and around the €3bn mark.
It’s still some way short of creating a liquid asset class, but it shows that with demand strong throughout the year, the more esoteric issuer has had success coming to market. Hopefully, that will continue into 2026.
The EU’s reform of the Securitization Regulation Framework has been making its way through the political system for some time now, but this week, the European Parliament published its draft amendments to the Commission's proposals. The response from the market has been, I think it’s fair to say, one of positive surprise.
I can recall conversations in my GlobalCapital days where the expectation was that the Commission would come out with a broad and ambitious list of proposals, which would then be slowly watered down as the final legislation got closer.
However, it seems here that the proposals from the Parliament’s Rapporteur, Ralf Seekatz of the EPP and CDU, have made a number of changes to the specific rules that the market was most aggrieved by.
The good folks at PCS Markets said it was a particularly long and arduous read to go through, but they have made a handy summary, here.
And similarly, GlobalCapital’s Tom Hall has written a pieced headlined: “European Parliament comes to securitization’s aid”
I’ve said for quite a while that what’s most interesting tome about these reforms is the politics behind them. For a long time, securitization was ignored by politicians, but this intervention from Seekatz et al suggests that those who want to kick-start the EU economy through financial services (like President Macron) are serious.
We’ll know more by Summer 2026, but it could really be a momentous year on the regulation front.
That’s all from me this week. Thank you for being such loyal readers these past 8 months. We’re an ambitious team at ARC Analytics, and I’m sure the Freshly Squeezed Newsletter will continue to go from strength to strength. Plus we’ve got some pretty exciting announcements coming soon.
Wishing you all a very peaceful Christmas period and a happy new year.
See you in 2026 – and in the meantime, let’s hope Chewie doesn’t inadvertently injure my 91 year old Grandmother!
Tom
© 2025 ARC Risk Models Limited
