With recent macroeconomic and geopolitical events, including Brexit, new questions have cropped up and market participants have been on the lookout for clues as to how the industry moves forward from here.

  • Brexit has caused uncertainty in many markets, and because auto ABS paper has a relatively short maturity, the effects of Brexit remain to be seen.
  • Negative interest rates in Europe have attracted more investors into the European auto ABS market.
  • ABS is a very complex product; however there are innovative aspects of Blockchain technology that could improve the process.

The auto ABS sector is among the most stable in the wider securitization market in Europe. In the UK in particular, the auto industry has been an engine of the post-crisis recovery and the sector has drawn securitization investors from far and wide looking for stable, relatively high yielding investments away from more traditional income markets.

Eileen Hughes and Marcus Herkle from Wilmington Trust weigh in on the outlook for the European auto ABS securitization market, consumer credit in Europe, and innovations bringing securitization into a new era.

This article appeared in the June 2017 issue of GlobalCapital.

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