ESF Reports New High For European Securitisation Issuance

European securitisation issuance reached another record in 2002, growing to EUR157.7 billion, up 2.7 per cent from 2001’s EUR153.6 billion, according to research by the European Securitisation Forum (ESF). The report found that growth was helped by European asset-backed securities (ABS) issuers taking advantage of attractive funding rates brought about by the market’s growing size and efficiency. In addition, investors have sought the relative safety of securitised debt in response to the uncertainty and instability in the global equity markets. High liquidity, low interest rates and increased geographical diversification contributed to strong underlying collateral performance in the MBS market, which in turn spurred greater investor demand and an increased supply of new issues. While still expanding, the rate of growth of securitisation volume eased in 2002. New issue activity in the fourth quarter of 2002 totalled EUR55.1 billion, up 54.3 per cent from the third quarter of 2002 but down 16.8 per cent from the EUR66.2 billion issued in the fourth quarter of 2001.

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