This article appears courtesy of Institutional Investor
Source: Securitization News
The South African securitization market is expected to see strong growth in 2006. After two flat years, there has been a pickup in activity this year­issuance for the first half of 2005 has been around ZAR8.2 billion ($1.4 billion), more than double the figure of ZAR3.8 billion ($650 million) for the same period in 2004. "The securitization market has grown due to the recognition that the debt capital or fixed income markets offer attractive alternative sources of term financing," said Stephen de Stadler, managing director at Fitch Ratings in South Africa.
South African deals tend to be smaller than European and U.S. transactions and range from around ZAR575 million to ZAR1.5 billion owing to the smaller asset base. "Transactions covered the main asset classes of auto loans, store cards and RMBS, therefore issuance is moving along nicely," said Chris Such, director of ABS at Standard & Poor's. Similarly, while European securitizations tend to have a more diverse mixture of assets, this is not the case in South Africa. ABS and RMBS dominate the landscape and although the first CMBS deal was only completed in last year, this is a sector which analysts predict will see substantial growth in the near future.