5/11/2026
Good morning, hope you enjoyed my tame efforts to bring ABBA songs into the conversation whenever Sweden is mentioned.
In the previous newsletter, I touched on the slightly concerning lack of non-auto collateral. And it seems that the market’s response has been to say “can I interest you in any esoteric auto, instead?” And while I’m not even sure you can consider car loans from citizens of one of the top GDP per capita nations in the world as esoteric, Santander Consumer’s €600m auto ABS SC Sweden 1 Sarl is the first Swedish auto deal to have Euro tranches.
It’s also the first Swedish deal of any kind since 2019. So, hats off to Santander Consumer and the leads, and also the lawyers – I’ve heard from numerous sources over the years how difficult it can be navigating the securitization regulations in the Nordics, so no doubt a great result (alongside some great pricing).
Elsewhere, the more familiar autos dominated proceedings with another VCL from Volkswagen and a Spanish auto from BBVA Consumer. A few weeks ago, Mercedes’ Silver Arrow kicked off the recent rally, pricing at 42bps over 1-month Euribor for its €500m triple-A tranche.
This time, VW placed €1.05bn of triple-A paper in what was looking to be a decision of size over spread. But such was the strength of demand that they also managed to price at 42bps. A brilliant result, and one that hammers home the advantage liquid and established issuers have at the moment. Away from autos, there was some activity – albeit with a lot of protection for the senior tranches.
First, we had Funding Circle’s latest £353.3m SBOLT (Small Business Origination Loan Trust) 2026-1, a UK SME ABS. In addition, Together launched its sixth CRE deal from its eponymous ABS programme, the £582.6m TABS 2026-1 CRE-6.
For both deals, there was significant care taken to manage the largest tranches. Together had a £137m triple-A loan note tranche not offered alongside some lead-affiliated interest on the remaining £320.5m Class A’s. Meanwhile, Funding Circle preplaced its Class A’s, only offering about £50m of mezz paper instead.
I wouldn’t go as far as saying it’s a clear indicator of how difficult it can be for more esoteric collateral because both Funding Circle and Together typically preplace those tranches anyway, having done so for a number of years in prior editions.
The pipeline for this week continues to showcase auto issuers, but we do have French and German consumer ABS offerings from SocGen/Boursobank and Santander Consumer respectively, alongside a Sterling a Leeds Building Society prime rmbs (almost exactly a year since it last placed Albion paper in primary). Keep your eyes peeled for how they go as a potential flood-gate opener for non-autos.
SC Sweden is the inaugural securitisation of SEK-denominated Swedish auto loans originated by the Swedish branch of Santander Consumer Bank. The deal stands out as the first to feature a Euro-denominated tranche backed by Swedish auto assets (Oct-2012's Svensk Autofinans was entirely SEK denominated). Offering a part marketed / part pre-placed Euro triple-A note (the rest SEK-denominated and pre-placed), SC Sweden is joining the bandwagon of record Euro auto ABS placement since 2023, Q1-2026 placement smashing all previous post-GFC Q1 records for the asset class.
Indeed, since the start of the year, no fewer than 15 Euro-denominated auto ABS have been sold. Meanwhile, the market has ground tighter before wobbling as significant Q1 supply (combined with fears over Iran and energy prices) saw investors take a breather with the approach of Easter. However, demand has since returned in no uncertain terms...click here to read the full overview on Concept ABS.
The US-Israel-Iran driven volatility in broader financial markets continues to ebb and flow. With Brent crude at around $114 / barrel at the start of launch week, nothing could be taken for granted. Indeed, a post-GFC record E28.5bn of supply in Q1 saw Euro ABS spreads come under pressure in tandem with the global instability emanating from the middle east. Add to that a record Q1 of sales in auto product (topping E6bn) and it was hardly a shock to see auto issuers forced to offer as much as 10bps more in the run-up to Easter than they may have planned for at the height of the pre-March bullishness.
However, the post-Easter market is in much finer spirits, deals once again pricing aggressively on the back of bumper coverage after a two week fallow period from the end of March.
With auto ABS continuing to grab the headlines, four deals pricing in April (Mercedes, Bank11, Swiss lender Multilease AG and RCI Banque – generating a combined excess demand of E3.5bn between them) and another five piling into the pipeline alongside SC Sweden, Santander was riding a wave of improving sentiment for its ground-breaking deal... click here to read the full market context on Concept ABS.
That’s all from me this week. Frequent readers will be glad to know that my heart rate has now returned to normal after Arsenal’s great escape on the weekend. We also get to look ahead to a date with destiny on May 30th, as Arsenal look to win their first ever Champions League title.
Before that, my weekend was spent in full adult male mode. I drilled holes into our bedroom wall to make the new curtain rod – with a minimum of fuss. And then I cooked a BBQ for some neighbours, including a very picky 6-year-old and a toddler. A thumbs up from them was nearly as good as hearing the referee disallow West Ham’s late equalizer.
Have a great week,
Tom
© 2026 ARC Risk Models Limited
