Bahamas 
Brazil 
BVI 
Canada 
Cayman Islands 
Curaçao 
USA 
Australia 
China 
Hong Kong 
India 
Japan 
New Zealand 
Singapore 
Belgium 
Cyprus 
Denmark 
Finland 
Germany 
Guernsey 
Ireland 
Italy 
Jersey 
Luxembourg 
Norway 
Spain 
Sweden 
Switzerland 
The Netherlands 
UAE 
UK The start of 2019 has been slow. We haven’t seen one issuance in the first three weeks of the year. Compare this to the same period of 2018 with circa €30bn of deals issued. Finally, after three weeks of a drought, Blackstone is the first to announce a new deal in the Eurozone, a EUR CLO – CROSTHWAITE PARK CLO.
Why the lack of activity?
As of 1 January, the new harmonised securitisation rules have been applied (STS). Issuers visited the market before the year end to ensure they didn’t delay deals in early 2019 whilst they put in place the processes and necessary infrastructure to comply with STS regulations. This resulted in an unseasonal spike in December issuance.
Alongside this, the European market is still awaiting an outcome on Brexit. A no-deal scenario, a new government and a second referendum all hang in the balance. The economic uncertainty is creating significant volatility in the market and causing secondary ABS spreads to gap out, making primary issuance unattractive.
What now?
The unfavourable issuing market is likely to mean that Q1 remains sluggish. However, many issuers will still require funding through the public wholesale markets. So, once the details of the new regulations are clear and there’s an established pathway to compliance, we expect issuance to pick up. We understand that there’s a pipeline of new deals waiting to go – will this trade by Blackstone break the seal and other deals start to trickle through?
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