European Structured Finance May 2021 in Review

European Structured Finance
May 2021 in Review

• CLO market dominant accounting for 17 of 26 public deals in May
• Auto supply matches April with three public issues, including new benchmarks
• RMBS supply accelerates from April as four deals, specialist sales lead
• CMBS market sees first deal since mid March
• Market busy, but downward supply trend from February peak extends

• Issuance volume in May marked the third straight monthly decline from a peak of EUR25bn in February. Some EUR10.6bn of public issuance was recorded in May, down from EUR12.6bn in April and EUR19bn in March, but it has been active nonetheless.
• The 26 transactions in May pushed total issuance, including placed and retained deals, through the EUR100bn mark to EUR111.6bn as at 31 May 2021. Issuance over the first five months of 2021 was almost double the EUR58.4bn at the same stage in 2020. Placed issuance is around EUR73bn, versus EUR28.3bn at the same stage in 2020.
• CLOs remain busy, with four new issues, 10 resets and three refinancings in May. However, spreads continued along on a widening trajectory with new issue Triple As hitting 88bp in the month, some 11bp wide of the 77bp YTD tight seen in March. One of the new CLOs included the first 2-year non-call period since early March.
• Four RMBS printed in May, versus just one in April. Issuance emanated from the UK (BTL), Ireland (performing/reperforming legacy collateral) and the Netherlands (BTL and prime STS bonds). RMBS issuance neared EUR1.9bn equivalent in May, taking the YTD total over EUR18bn equivalent.
• Three public auto ABS were sold in May. Deals came from Germany (tightest since the financial crisis), the Netherlands (issuer returning after six years) and the UK. There was also a part-privately placed German issue. Including the privately placed notes, May auto issuance was EUR1.84bn equivalent to take YTD sales to EUR6bn equivalent. This is around EUR1bn higher than at the same stage in 2020.
• One CMBS priced in May, taking the year-to-date tally to six – matching the whole of 2020. The new issue was backed mainly by office property distributed across five countries. YTD CMBS issuance is near EU2bn equivalent. At the same stage in 2020 three deals had been launched.

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