Holmes smashes records as UK begins year with a bang

Sterling issuance began 2026 with a bang last week, led by Santander’s Holmes Master Issuer 2026-1, which became one of the biggest fully marketed Prime RMBS since the GFC. They managed to sell a whopping £1.25bn of AAA paper.

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I’ve diligently searched through the Concept ABS archives, and by my count, no Prime RMBS issuer has been able to fully market this much in AAA sterling notes since 2009! The likes of Virgin’s Gosforth and Lloyd’s Permanent in the 2016-17’s all had dollar and euro tranches.

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A simply stunning way to banish the disappointment of 2025 and kick-start the year.

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Yet that was not the only action from the UK. Vida Bank, a perennial early-year issuer in their Belmont Green days, returned its Tower Bridge series to market for the first time since September 2024, although only£250m worth of AAAs was on offer. Meanwhile, Toyota also got in on the act, following up its 2024 UK debut with the £658m Koromo 2. Both showed good demand, and together set up the sterling market for a strong few weeks.

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Indeed, at £2.15bn of issuance, in just a week those three trades have placed more than 50% of the Q1-25 sterling issuance total of €4.3bn(equivalent). And, it doesn’t look like being a flash in the pan either. Blackstone/Mileway and now Atom Bank are also in the market early.

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What’s more, there was £1.5bn of unfulfilled demand last week. A clear signal that the technicals in sterling are overpowering all other concerns one might have.

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In euros, there was just one trade, Volkwsagen’s VCL 47 –their fourth in 12 months – which managed to upsize from €750m to €1bn yet again.

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Perhaps the most impressive thing about VCL 47 was the 43bps over 1-month Euribor AAAs, landing on top of Mercedes’ latest Silver Arrow back in October. Sure, we could’ve expected strong demand with no German benchmark auto paper in the market for 3 months, but VCL had already placed around €3.5bnsince the beginning of 2025.

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Put simply, I’m not sure such volume from one issuer would have been possible just a couple of years ago. How many investors would have spoken of “name limits”, or wanted just a bit more diversity in their portfolios.

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It’s another clear, positive sign for the securitization market as a whole that there are more EU investors than there were two or three years ago.

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What’s fascinating to understand is why. Whether that’s because of regulation, or asset managers predicting where regulation is heading. Whether it’s because the explosion of private credit and ABF and even SRT means the swim across to public ABS is much easier than it was before. Whether it’s just a decade of solid performance means the outdated characterizations of the industry have faded away.

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It’s not 100% clear, but whichever way you look at it, it’s good news for the market.

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Final Word

Typically, I draft the majority of the Freshly Squeezed Newsletter on Friday, and take a look with fresh eyes come Monday to ensure no silly spelling mistakes etc., but every so often, there could be a market even tor loads of new deals that means I must pivot.

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Clearly, the geopolitical tension amongst NATO allies became that bit more severe this weekend. Still, nothing has really changed besides language.

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But it is surely close to becoming unwise for financial markets to just shrug their shoulders until something does happen. Let us hope that the temperature decreases in the coming days.

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That’s all from me,

Have a great week,

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Tom

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