3/2/2026
Geopolitical discussions are becoming a worryingly frequent theme of the Freshly Squeezed Newsletter. There have been strikes on Iran and Lebanon, alongside terrifying scenes of missiles and drones flying above major cities throughout the Middle East.
But it’s not for this newsletter to opine on the conflict except to understand how it affects markets. So far, it seems that the impact is negligible. Energy prices are invariably going to spike, as will safe-havens like gold. But what for ABS?
The market has been remarkably resilient in the face of broader geopolitical issues over the past 18 months, but this is probably the most serious event in that time. I think it’s fair to assume that any deals slated to hit screens today may wait another week. But there are a couple of trades in the pipeline with so far no noise on them being negatively impacted.
For now, I imagine European ABS will have to wait and see how things develop.
It was not a storming week by any means as a few players surely had one eye on the kids with half-term, but perhaps it showed how fully engaged investors are following two euro trades with booming demand.
Euro supply has been comfortably absorbed and books routinely multiple times covered all year so far, but Auto ABS remains front and centre. Since late January, four euro auto deals have priced for a combined €2.9bn, only marginally behind the €3.1bn placed over the same period in 2025. And bumper demand has become the norm rather than the exception.
Stellantis’ €500m FT Auto ABS Spanish Loans 2026-1 (with €100m of Class A pre-placed) entered a market clearly ready and willing. IPTs were pitched to encourage momentum, notably offering up to 10bps concession at the top of the stack and up to 30bps further down versus September’s Santander Consumer Spain Auto deal.
And it meant that books swelled from solid to spectacular, with final coverage multiples of 4.2x, 6.5x, 7.8x and 8.6x across the marketed tranches. In the end, the seniors finished with the tightest fully marketed Spanish auto levels since 2016, while the mezz and junior tranches reset post-credit-crunch spread lows for the asset class in Spain.
Meanwhile, it has been a quietly super start to the year for Prime RMBS in euros. And so came Lloyds’ latest deal from its Candide shelf, the Dutch RMBS platform.
It was initially set to be a €500m AAA senior tranche for Candide Financing 2026-1, but such was the appetite, that grew to €750m, taking the full issue size to €789m (with two retained tranches).
Despite a competing Spanish auto deal dominating headlines and U.S. macro noise in the background, demand for high-grade Dutch mortgage risk was unshakeable.
Tightening from low 50s IPT to 46bps print, alongside a €250m upsize is no mean feat in any market, and it signals conviction in core European housing credit. Unlike Stellantis’ auto deal, this wasn’t about resetting records, it was about proving depth.
Coverage remained robust even as spreads compressed, suggesting that prime RMBS remains structurally under-owned relative to demand.
Elsewhere, I was very fortunate late last week to have a quick catch-up with regulation aficionado, the sommelier of European securitization politics, Ian Bell, the CEO of PCS.
With the tectonic plates of securitization regulation shifting at breakneck speed (when compared to the last 15+ years), it’s always fascinating to pick Ian’s brains – and ensure that the Freshly Squeezed Newsletter is at least partially based on reality!
One of the things my ChatGPT analysis of the MEP’s amendments to the EU proposals may struggle to grasp, is which amendments to weight heaviest. For example, one amendment called for binning the whole thing, but it’s quite hard for ChatGPT to know if that has any chance of getting through a vote in Parliament.
Ian said: “Currently, in the Parliament it seems the majority is forming around a Renew/EPP/ECR axis. This may change, of course, with the vagaries of negotiations. This is politics, after all.”
For those not in the weeds of EU politics, that suggests those pushing for reform are distinctly on the Centre-Right and Right of the European political spectrum.
In addition, he said that the European Commission “may have overestimated” how difficult it would be to get the reforms passed. “This is not necessarily their fault,” he added. “After all, the world changed dramatically after the proposals were released,” alluding to events at Davos and so on.
As for the UK’s proposals, Ian agreed that on the Securitisation Regulation side they had taken a “big red pen” to the regulations.
However, on the prudential side of things, the UK had so far been “much, much, much less ambitious”. It will be interesting to see how it all develops, and where we go from here. My increasing fear is that we miss the boat on prudential regulation, and end up 5 years down the line bemoaning that fact.
The last few months (and even years) suggest that investors across Europe, whether they be asset managers or bank treasuries, see securitized products as a safe haven.
But if prudential rules don’t change, it will always be a safe haven on the edges.
Finally, some of the keen-eyed amongst you may have noticed that I became an uncle last week, almost at the exact moment I hit publish on the previous edition.
As the eldest of three boys, it’s quite unusual to see the youngest, Dan, who I tormented growing up and still remember wearing nappies, suddenly changing them with his own son.
The baby is called Rory, which funnily enough is the name of my best friend. A friend who used to grab the new father by his underpants and swing around the living room. Perhaps being included with the “big boys”, despite it being under these humiliating conditions, left a lasting positive impression!
So, I saw baby Rory for the first time this week and he’s absolutely gorgeous, while his mum is a champ.
With a surname like Lemmon, he’s in for a rough few years. But I can say from experience, that it gets better with time, and being hard to forget is no bad thing.
Unfortunately for baby Rory though, his parents have decided to double-barrel his surname to Lemmon-Moran… which we think sounds scarily similar to “lemon meringue”.
Have a great week,
Tom
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