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Much of the analysis for last week’s Champions League football matches centred around the domination of English teams versus their big name counterparts in Spain, Italy and Germany.

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This season, English teams have a 71% win-rate versus 50%for Germany, 44% for the Italians, and just 40% for Spain. My beloved Arsenal sit at the top of the table conceding zero goals so far, while Chelsea were the only English team without a win in midweek. It’s not hard to see why some are calling England the “super league of Europe”.

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However, for those who get patriotic about ABS issuance, sterling paper would certainly not be favourites in a battle with euros this year.

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That trend continued last week as Stellantis’ Italian Auto ABS, the €1bn Italian Stella Loans 2025-2 had a storming finish, while the sterling market looks to be staggering towards the year-end finish line.

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The leads for Stella 2025-2 played it smart with tempting IPTs, a planned 30–50% preplacement of the senior tranche, and two rounds of aggressive tightening once the book caught fire. Coverage then peaked at 6.6xand 8.3x on the mezzanine notes, with a €1 billion upsize secured and final spreads landing 5 bps inside the prior week’s A-BEST 24 reissue. Even with fatigue creeping in, the market clearly isn’t done.

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For the market overall, it’s a remarkable show of strength that perhaps some (like me) can overlook. A banker said to me this week that regardless of spread movements, investors are clearly still “there” – as they have been practically all year.

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What they meant was that deals are being executed on time, as planned, over and over again. We’re not seeing deals held until after the weekend or even running late into Friday, the standard is there’s a week of marketing and by Wednesday or Thursday, everything’s done.

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That alone shows the market is in a far better place than it was a year or two ago.

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Sluggish Sterling

Okay, perhaps my sub-head is being a bit harsh on the UK market, but in comparison to euros, its clearly not having as good a time. What shouldn’t be taken for granted though is, as my banker friend said, the investors are still there… albeit with a slightly firmer hand when it comes to spreads.

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Oodle’s UK Auto ABS, the £350m Dowson 2025-1, is one such example. Like with Polaris two weeks ago, mezz coverage was through the roof but the seniors looked slightly shaky.

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IPTs looked deliberately tempting, offering as much as 30bps pickup at the single-A level versus last year’s Dowson prints. Demand built fast down the stack: coverage rose from 1.0x–2.9x initially to 1.2x–6.5x,culminating in a £1 billion-plus book. However, while the mezz tranches tightened materially, setting new spread lows for the programme in the process, the Class A’s wouldn’t budge from 90bps over Sonia IPTs.

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This was a trade that was never looking to rival the likes of BMW’s Bavarian Sky on AAA spread, but it nevertheless shows how fears over the UK economy more broadly mean AAA investors are driving a hard bargain.

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One last big push?

Next week looks set to be busy with six fully offered trades on screens already, including well-known shelves like Autonoria and Kimi in euros, and Braccan and Asimi in sterling.

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Could this be the last big push before we all hunker down for the holidays? I hope not, but I think it might.

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Final Word

That’s all from me this week. If anyone is heading to LSEG’s UK Securitization Summit next Tuesday, please do be sure to say hello as I’m moderating a panel featuring some great investors and issuers.

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Finally, my parents’ visit to Godalming this weekend was soured somewhat by Sunderland’s last minute equalizer, although I think my6-hour roast lamb made up for things.

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Have a great week

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Tom

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