Another Fine Mezz A better Vantage point
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May 21, 2025 George Smith and Tom Hall dive into the current market conditions, highlighting a slight dip in deal supply yet a resilient outlook. They explore recent challenges in pricing strategies and the impact of historical trends on current performance. Anticipation builds around bond issuance for the latter half of the year amid market uncertainties. A fascinating German data center ABS deal is contrasted with a previous UK transaction, showcasing the evolving landscape of Europe's asset-backed securities market.
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Issuers Cautious About Current Spreads
- Current ABS supply feels underwhelming partly due to issuers anticipating higher spreads if they proceed now.
- Some issuers prefer waiting for other deals to set better clearing levels before entering the market.
Unlikely Return to Pre-Crisis Tight Spreads
- Pre-crisis tight ABS spreads from early 2023 are unlikely to return soon due to market conditions.
- However, spreads may improve somewhat compared to the current levels.
Vantage Deal Pivots EU Data Center ABS
- The Vantage German data center ABS deal marks a key step for Europe by offering a 25-year term and a rated Class B tranche.
- This deal serves as a bellwether to validate investor demand and encourage further data center securitizations in Europe.