5/18/2026
At last we’ve had a week in ABS not totally dominated by German autos. It was starting to feel like being placed on some sort of pseudo-scientific “carnivore” diet of strictly fillet steak only.
Thankfully, we had a French consumer debut, Dutch and Italian autos, and a UK Prime RMBS from Leeds Building Society to offer something different. Although if German auto is like having fillet steak, Dutch and Italian auto is a bit like calling rib-eye and sirloin variety… Does UK Prime RMBS become roast lamb?
The problem with this analogy is that investors are by their very nature, red meat lovers. And perhaps what’s becoming an interesting theme this year is that their lust for prime cuts is increasing.
If we think back to the immediate fallout from the Ukraine war in 2022, the European ABS market was incredibly fragile. Market windows would appear and vanish again inside two or three weeks. Spreads, invariably widened out significantly over the rest of the year. And while the Iran crisis is perhaps the most serious geopolitical event since then, it’s had nowhere near the same impact on executing and pricing ABS deals.
Yet that is somewhat misleading. Investors are without doubt more discerning than they were last year. Truly esoteric deals have been virtually nonexistent, but even amongst the more established asset classes, issuers are having to prove themselves.
If you’re an established, repeat issuer with a long-standing track record of strong performance, you can build books quickly and tighten like oil prices aren’t floating around the $110bbl mark. But if you’re not, you need to bring your A-game to the investor meetings. Any infraction will be punished with slow and cumbersome book-builds, while if you want size and spread, you may end up being forced to choose one over the other.
So, last week showed that if you do the right things as an issuer, put your best foot forward with investors, it is still possible to get good sizes and good pricing.
Leeds’ £383m Albion No.8 was a great example of this. With a relatively small £350m triple-A tranche, the leads weren’t shooting for the moon, but with very little UK prime RMBS this year, they could lean on rarity value and a good, solid track record. Santander’s Holmes print back in January was much larger – at £1.25bn (across two triple-A tranches), but Albion managed to price 4bps inside it at 49bps over Sonia.
Similarly, Hiltermann Lease’s €404m Hill FL had to bounce back from some poor performance trends in recent years. But clearly, they were able to convince investors that underwriting standards had been reformed and improved, pricing just 3bps wide of their 2025 print with a last-minute upsize.
In all, things are not easy for the non-benchmark issuers. But the deals this week show that it is possible to print well even if you’re not a Volkswagen or Mercedes.
Hopefully, last week will pave the way for the broader ABS market to return in numbers.
Almost exactly a year since it last sold paper to Sterling ABS primary accounts, Leeds Building Society has returned with the eighth transaction from its UK prime rmbs Albion programme. Offering a single triple-A tranche, the deal encountered a conducive market, following a Q1 of relatively strong Sterling supply.
Post-Easter transactions have leaned on strong demand to print aggressively – especially at the lower ratings levels. Furthermore, despite an active pipeline YTD in UK collateral, accounts have not been presented with much comparable paper since the start of the year: only three prime UK rmbs marketed (including Albion). The triple-A IPT, on a restrained size of... click here to read the full overview on Concept ABS.
After a bullish start to the year, UK ABS softened into Easter – a combination of supply (Q1 ending with total placement of £7.1bn, well north of the equivalent for 2025) and the unexpected start of a middle east conflagration at the end of February eventually weighing on demand. Forced to wait the best part of a month before seeing new paper, UK accounts have rediscovered their mojo post-Easter and with the Barcelona conference looming.
Recent new issues have all boasted multiple rounds of spread tightening on the back of strong to bumper books, especially lower down the stack. Indeed, the three new deals that marketed paper since the end of the Easter break managed to deliver a combined £2bn of unfulfilled excess demand. As active as the Sterling primary market has been YTD, prime rmbs paper has been relatively scarce. By this time last year, six deals featuring high quality UK rmbs collateral had been sold – double the amount for 2026 thus far.
The leads for Albion No.8, seeking to sell a digestible £350m Class A tranche, started out with a respectful SONIA + mid 50s IPT. This was 4-5bps north of where a January Holmes transaction placed top rated paper (at +53 bps on a £500m size). Accounts responded positively, coverage evolving during the day – from 1.4x at the first book update to a reassuring 2.1x by the end of the day. This gave the leads more than enough leeway... click here to read the full Market Context on Concept ABS.
That’s all from me this week. I’ll be looking into some of the regulatory updates coming through over the past few weeks. It seems like a lot of market participants/trade associations are not happy with how the proposal was drafted (for the umpteenth time) as the process of Trilogue begins in the EU.
But the main problem in deciphering all this is we now have trilogue and there’s going to be a great deal of compromising and negotiating happening, so as of yet it’s not clear that any of the problems highlighted are going to remain as such. We may just have to wait and see.
Finally, the next time you read the Freshly Squeezed Newsletter either my 22-year dream of seeing Arsenal once again as English champions will be realized, or… their ignominy as perennial “bottlers” will be confirmed.
It’s scary to think that 22 years ago last Friday, May 15, 2004, I sat in stands with my dad having watched Arsenal coronated as “Invincibles”. As we left the stadium, he said to me, “you don’t know how lucky you are” – this was of course, the second time I’d seen us win the league in my very short life. He was about 6 when they won the Double in 1971, and had to wait until 1989 for the next one.
I thought he was mad. Luck?! It will always be Arsenal tussling for the title with Manchester United, I thought. How wrong I was.
Wish them (and me) luck and have a great week,
Tom
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