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63% of European Issuance Rated AAA in Q3-2019

€25.6billion of the €40.4billion in European securitisation issuance during Q3-2019 had the highest possible rating of ‘AAA’, according to new data from the Association for Financial Markets in Europe (AFME).

Issuance with a rating of at least ‘A’ accounted for 85.3% during the quarter, while a further 7.0% was unrated.

AFME European Issuance by Rating Q3-2019
Data: European securitisation issuance during Q3-2019, by rating; Source: Association for Financial Markets in Europe (AFME)

During the first three quarters of 2019, AAA-rated issuance accounted for 68.8% of total European securitisation activity.

This is up from 53.3% of issuance rated AAA during 2018, and 47.8% in 2017, indicating that the collateral quality of new securities appears to be improving markedly.

Issuance of BBB or lower rated issuance was at 5.7% during Q3-2019, which is a lower rate than FY2018 (6.7%) but broadly in line with previous years.

European issuance in 2019 has been running far below that in 2018, with €133.5bn issued during the first three quarters of 2019 versus €181.1bn over the same period in 2018.

Issuance activity tends to pick up in Q4 of each year, so all eyes will be on the Q4-2019 data once it is released by AFME. European Q4-2018 issuance was €88.6bn, well above the average of €60.4bn in the first three quarters of the year.

Dominick Barrett
Dominick Barrett
Dominick is Managing Director of Atlantic Star Consulting.

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