Not many parts of the structured finance market have managed to avoid fallout from the crisis in US sub-prime. South Africa seems to be one of them. However, as more and more issuers embrace the concept, supply has outstripped demand and spreads are trending wider.
Barry Martin, head of securitization at Rand Merchant Bank, a division of FirstRand Bank, says: "Spreads have been increasing slowly over recent months, long before any sub-prime problems in the US. There is simply too much supply as banks start to use securitization as a way to diversify their funding sources. I also can’t see the demand side changing a...
