The announcement in mid-August that UK mortgage lender Santander was due to launch its fourth prime RMBS deal of 2010 might give the impression that the RMBS market in Europe is returning to health. This remains very far from the case. Deals have been done but they have been almost exclusively triple-A – as this £1.25 billion ($1.9 billion) one is likely to be – and almost universally pre-placed to some degree with JPMorgan’s treasury arm. The US bank has been fundamental to the return of prime RMBS, but some now argue that its continued underpinning of the deals that have been done could be counterproductive as it prevents a genuine repricing of the asset class.
| "The biggest problem in this market at the moment is that supply is too sporadic" James King, M&G |
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Euromoney spoke to a number of ABS investors over the summer and found them enormously frustrated at the slow pace of recovery in the market and the unpredictable rate of new issuance. "The biggest problem in this market at the moment is that supply is too sporadic," says James King, director of fixed income at M&G in London.
