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ESN debate

Category: ABS Capital Relief Trades Regulation

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Could structures cannibalise true sale ABS?

The European Parliament recently called for legislation to establish European Secured Notes (ESNs) to facilitate SME funding. The EBA is also supportive of an ESN funding option, alongside traditional covered bonds, but there are concerns about the potential for the instrument to eclipse true sale securitisation issuance.

“ESNs are touted as dual-recourse instruments and are expected to largely have the same features as covered bonds.

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