News Analysis
CMBS
SCI in Focus: Securitisation and private credit in lockstep for Europe's data centre future
Experts weigh in on public versus private deals, geopolitical risks, Canada-US trade tensions and the challenge of financing non-IG tenants
As Europe's data centre market continues to evolve, industry insiders say the continent will likely emerge as a diversification play alongside the US, with multiple European countries on the radar. Private credit and securitisation are both likely to play increasingly important roles in the build-out of the market.
According to Darrell Purcell, director EMEA structured finance at S&P Global Ratings, several large global data centre operators have a strong presence in Europe, with numerous facilities currently under construction. "We expect any future ABS pipeline to come from the FLAP-D cities – Frankfurt, London, Amsterdam, Paris, Dublin – or emerging hubs such as Berlin, Madrid and Milan. Last year, we saw the first European data centre ABS deal – Vantage Data Centers Jersey Borrower – so the market is at a nascent stage but expected to grow."
Meanwhile, market sources speculate that a second Vantage data centre ABS deal may be in the pipeline, reflecting growing investor interest and momentum in this space. Barclays and Deutsche Bank, reportedly working together on the euro-denominated transaction, have not confirmed the speculation to SCI, but if the deal materialises, it could hit the market by Easter. Such a transaction would underscore the expanding role of ABS in financing Europe’s digital infrastructure growth.
Structural similarities between European and US transactions are expected, with Purcell noting that "future European deals will likely be structured similarly to US ABS, featuring five-year interest-only periods before long cash sweep paydowns." The main difference is the legal maturity: "The European Vantage ABS had a 15-year legal final, compared to US ABS, which typically extends beyond 25 years. Depending on the asset mix and lease durations, longer-dated European ABS could emerge, but asset liquidation may still be necessary for full bond redemption."
Mirco Iacobucci, sector lead for European CRE ratings and senior vp at Morningstar DBRS, highlights a key distinction between issuance methods: "European data centre transactions are structurally similar to those in the US, but whether they originate from an ABS or CMBS desk makes a difference. ABS transactions often employ a master trust structure, whereas CMBS transactions involve static pools or single properties."
The US has led the way in financing data centres through ABS and CMBS, creating deep capital markets for these assets. Europe, by comparison, has been slower in adopting securitisation.
“The US has shown strong capital markets demand for these assets,” says Felix Zhang, partner in alternative credit at Ares. “If structured correctly and rated appropriately, securitisation can be one of the most efficient financing methods.”
Roopa Murthy, partner and head of Ares EMEA infrastructure debt, agrees, noting that as European data centres scale up, securitisation is likely to follow. “We believe it’s a natural evolution for them to tap capital markets,” she adds.
In contrast, European financing remains more fragmented and very jurisdiction-specific, with commercial banks dominating senior-level lending. “The biggest source of financing in Europe is still traditional bank debt, but private credit is definitely gaining market share,” says Murthy.
A key reason for entering capital markets is that pooling hyperscalers into ABS structures can help investors diversify risk. "The biggest growth area is hyperscale, single-tenant, single-asset deals, which can carry more risk if their single tenant needs to renew their lease before their debt is repaid,” says John Medina, svp in Moody's global project and infrastructure finance team. “They can be lower risk if the debt can be repaid within the first lease term, given their investment grade rated hyperscale tenants. Pooling them into ABS structures diversifies that risk, reducing expected loss and improving credit ratings.”
As investors approach their allocation limits in US data centre ABS, there's a noticeable shift towards seeking diversification in non-US markets, with Europe emerging as a prime destination.
"Private credit investors are questioning the amount of exposure they have to US data centre ABS,” adds Medina. “Several feel overallocated and are looking for non-US opportunities and other debt products to diversify. In Europe, private credit is expanding, and we expect to see more in the coming years.”
He adds: “For data centres in the US, beyond traditional ABS, we're seeing more esoteric private credit structures, data centre warehousing facilities, and early-stage financing through large-scale joint ventures."
Public or private?
The question remains whether European data centre ABS transactions will be privately structured or gain traction as publicly rated deals. S&P’s Purcell notes that while the market is still developing, "private credit firms show strong interest in digital infrastructure assets across various financing stages, including during construction and development. ABS is generally the final form of financing once data centres become operational and generate stable cash flows."
Morningstar DBRS’s Iacobucci sees room for growth in public financing. "We expect publicly rated asset-backed financing to continue growing as a key funding source for transactions secured by data centres. However, European investors must become more familiar with this asset type and the methodologies applied by different rating agencies."
A major obstacle to European data centre ABS growth is the relative size of the securitisation market. "As of the end of 2024, over $32bn in asset-backed financing has been issued for US data centres, compared to just £600m for the European Vantage transaction," Iacobucci explains, citing data from Cushman & Wakefield.
S&P’s Purcell adds that investor base constraints could limit expansion: "From London, Paris, and Frankfurt alone, we expect over 3,300 MW of new IT power to enter the market by the end of 2029. The extent to which this supply requires multiple financing sources remains to be seen."
Both experts see the US market as a reference point but note important structural nuances. "One unique aspect of US data centre securitisation is issuance from both ABS and CMBS desks," says Morningstar DBRS’s Iacobucci. "Historically, colocation and multitenant facilities were financed through ABS, but with the rise of hyperscale data centres, CMBS financing has gained momentum. However, financing demand is too vast for any single source."
S&P’s Purcell points out an additional European complexity: "We observe more tax-related risks in European transactions compared to the US, which we factor into our criteria. However, we still apply the same global data centre criteria across jurisdictions."
As geopolitical tensions and expanding capital demands reshape the digital infrastructure landscape, private credit is emerging as a key player in financing the next wave of data centre expansion. With traditional funding sources struggling to keep pace, investors are turning to more flexible, fast-moving private credit markets, offering tailored financing at different stages of a project’s development.
“Raising debt is often faster than raising equity,” says Ares’ Murthy. “We see this playing out a lot in Europe, where private credit helps accelerate timelines.”
Private credit is playing an increasing role in both markets. "Banks once played a larger role in financing US data centre development, but risk-based capital rules have made it harder for them to take on incremental exposure," says S&P’s Purcell. "This has opened opportunities for private credit firms to step in, particularly during the early construction phases. Stabilised properties tend to attract lower-cost financing in public markets."
Morningstar DBRS’s Iacobucci sees private credit as a necessary part of the financing ecosystem. "Given the publicly stated investments in data centre infrastructure by hyperscalers, we anticipate ongoing financing needs across the full lifecycle – from predevelopment costs and construction financing to permanent debt facilities."
To meet the growing capital demands of data centre operators, private credit firms like Ares are increasingly working alongside banks.
“We’re often partnering with banks – acquiring portfolios, taking first-loss positions, and acting as capital partners as they expand their own balance sheets,” adds Ares’ Zhang.
Geopolitical risks and digital infrastructure outlook
As the race to dominate the digital economy intensifies, competition among countries is driving increased investment in data centres, which have evolved beyond commercial assets to become critical pillars of national digital sovereignty.
“It does feel like a bit of a race now,” adds Zhang. “There’s almost a national element to it – who builds these data centres first and at scale.”
While geopolitical risks like US-EU trade tensions and reliance on American tech infrastructure are factors to consider, their impact on European data centre ABS is uncertain. "Revenue is typically contracted for long periods – often exceeding 10 years – so any geopolitical effects should have a negligible impact on transaction cashflows," says S&P’s Purcell. "However, macroeconomic changes could influence asset valuation."
Regarding broader digital infrastructure ABS, Purcell remains optimistic despite potential policy shifts under a new US administration. "The data centre sector’s growth is fuelled by AI and cloud services, supporting rent and top-line expansion for operators. While planning permission and power access pose challenges in Europe, they could drive growth in secondary locations."
Morningstar DBRS’s Iacobucci agrees, adding that "despite obstacles such as land availability, power constraints and sustainability regulations, we still expect strong capacity growth in European data centres for 2025. However, the impact of recent trade tensions remains difficult to predict."
According to Ares’ latest In the Gaps newsletter, the competition is not just about building the critical infrastructure, but also about securing the critical resources that will power the future of digital economies.
Data centre developers and power producers are racing to secure land, construction materials, water for cooling, hardware (such as chips and storage devices), fibre and access to energy resources, as supply chain bottlenecks can cause power connection wait times to soar from 18 months historically to over four years.
“Geopolitical risk for market players is most heightened in construction projects,” explains Ares’ Murthy. “You have to consider supply chains – where materials are coming from, whether they’re being imported and how geopolitical factors will impact costs and project timelines.”
Indeed, the Trump administration’s 25% tariffs recently imposed on steel imports from EU countries will likely directly impact data centre construction, as steel is a primary material for building these structures. The tariffs could also disrupt supply chains, leading to product shortages and causing delays and budget overruns.
S&P’s Purcell acknowledges that the unpredictability of US tariffs on European tech components, including semiconductors, creates uncertainty. "S&P Global Ratings sees a high degree of unpredictability in US policy implementation and our baseline forecasts carry significant uncertainty. We will reassess macro and credit implications as the situation evolves."
However, from a credit perspective, supply constraints resulting from the tariffs could benefit existing assets, reinforcing rent growth and improve refinancing prospects.
"In CMBS, we see loans backed by properties that have already been built. If we see fewer new data centres than expected, then I’d be more confident in existing assets – less supply supports higher rents and stronger refinancing. While equity markets chase growth, credit investors see too much new supply as a risk," says Brian Snow, vp, senior credit officer at Moody’s Ratings.
“That said, data centres remain one of the strongest real estate sectors, benefiting from long-term digitisation and e-commerce trends that won’t slow down,” he adds.
Impact of Canada’s potential retaliation on US data centres
Beyond Europe, rising trade tensions between the US and Canada have led to concerns about energy stability and costs for US data centres that rely on Canadian electricity imports.
However, Morningstar DBRS’s Iacobucci expects minimal disruption. "Energy costs are generally passed through to tenants via NNN leases. While Canada’s role as a major exporter of crude oil and natural gas could raise costs for refineries and utilities, these expenses would largely be absorbed by tenants. Hydropower accounts for about 1% of US electricity, so any pricing changes would have minimal operational impact,” he says.
Amid escalating rhetoric, both nations have opted for dialogue over conflict. Earlier in March, Ontario Premier Doug Ford and US Commerce Secretary Howard Lutnick announced plans to meet in Washington to work toward a resolution.
Financing non-IG tenants: a catalyst for innovation
Looking ahead, as data centre projects continue to grow in scale and complexity, innovation will be essential in developing the financing structures needed to support them. While hyperscale giants like AWS, Google and Microsoft have long dominated the market, a new wave of emerging players, such as OpenAI and CoreWeave, is creating new financing challenges.
“The big question now,” says Ares’ Zhang, “is: How do you underwrite companies in the AI and cloud computing space operating with significant scale but that don’t have investment grade ratings? That’s where innovative structuring and underwriting will become crucial moving forward.”
If the anticipated second Vantage Data Center deal materialises, it could mark a pivotal moment for European data centre ABS, signalling growing institutional acceptance of securitisation as a viable financing tool for the asset class, mirroring its success in the US.
In parallel, private credit is poised to solidify its role as a key enabler, stepping in to provide flexible solutions at various stages of a data centre’s lifecycle, from early development to long-term financing.
As the digital infrastructure landscape evolves, the financing ecosystem will require a balance between innovation, risk management and geopolitical adaptation.
With Europe scaling its digital sovereignty efforts, the collaborations between banks, private credit and public markets will be instrumental in shaping the next phase of data centre expansion.
Selvaggia Cataldi, Marta Canini
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News Analysis
Asset-Backed Finance
SCI In Conversation Podcast: Stephen Usher, BC Partners
We discuss the hottest topics in securitisation today...
In this episode of the SCI In Conversation podcast, SCI associate editor Marta Canini speaks to Stephen Usher, md on the investment credit team at BC Partners, about the evolution of private credit.
Usher discusses growing opportunities in specialty finance and asset-backed lending, and how these trends align with BC Partners’ long-term growth strategy. He also shares his insights on the firm’s strategic moves, including its recent partnership with Piper Sandler and the acquisition of Runway Growth Capital. Finally, Usher takes a closer look at the diversification and risk-reward potential of private credit investments, offering a forward-looking perspective on the sector’s future.
This episode can be accessed here, as well as wherever you usually get your podcasts, including Apple Podcasts and Spotify (just search for 'SCI In Conversation')
Marta Canini
News Analysis
ABS
ESG securitisation issuance rebounds amid broader market recovery
Soaring 2024 volumes in ESG ABS follow two sluggish years
Europe's ESG securitisation market is showing signs of revival, bouncing back in 2024 after two challenging years for the wider fixed income universe. Total ESG-labelled securitisation issuance reached €5.5bn, up 177% from 2023, according to
AFME data. However, while the figures reflect some growing momentum, they remain modest compared to other corners of the sustainable finance space.
"We observed roughly about €5.5bn in ESG securitisation issuance – that’s around 2% of total securitisation issuance in Europe," says Julio Suarez, director of research at AFME. "Although the market grew last year, this is coming from a very small base."
However, the resurgence in European ESG ABS last year reflects the broader fixed income market rebound in 2024, after two hard years of macroeconomic pressure, high inflation, rising interest rates and elevated spreads.
In total, European securitisation issuance across all asset classes rose to €244.9bn in 2024, as reported by AFME – a 14.8% year-on-year increase, or 11.9% when adjusted for inflation.
"The market is certainly in a more friendly and engaging way in 2024 compared to 2022 and 2023," Suarez notes. "There was a wider fixed income primary market improvement in Europe and globally."
Despite the uplift, ESG securitisation continues to lag far behind other parts of the sustainable finance universe. "Compared to other fixed income markets, the use of ESG is not as visible or as prominent in securitisation," Suarez says. "In total in Europe, roughly 13% to 14% of fixed income issuance is ESG-labelled, whereas for securitisation it is around 2%."
While the headline figures suggest a revival in ESG ABS issuance, data needs to be handled with caution – as given the high inflation seen over the last two years, nominal growth appears less impressive. "These numbers need to be taken with a pinch of salt, and properly inflation-adjusted – of up to 18%," Suarez adds.
In 2024, ESG issuance in Europe was also driven largely by repeat issuers, including programmatic deals such as ING's
Green Lion
RMBS, Obvion’s
GreenStorm
RMBS in the Netherlands, and
BPCE’s green home loans
in France.
A standout deal came from newcomer Vantage, with
the UK’s first ESG-labelled data centre ABS
– which Suarez highlighted as a promising sign for future ESG ABS issuance. "Data centres are everywhere and certainly a promising sub-asset class," stated Suarez.
The range of collateral in ESG-labelled deals broadened last year with this debut from Vantage, as well as the long-anticipated solar ABS from
Enpal
–
signalling growing innovation
beyond the traditional green RMBS market.
Despite positive signs, investor incentives remain muted, as ESG pricing benefits, or ‘greeniums,’ have narrowed significantly since reaching their peak a couple of years ago. "In 2022, we saw greeniums momentarily reaching about four basis points. But of late, it’s roughly around one basis point or lower – for the latest transaction, it was about 0.42 basis points," Suarez said.
Green-labelled deals continue to dominate the ESG securitisation landscape, accounting for over 70% of 2024 transactions, while social-labelled issuance – led by
auxmoney’s two 2024 consumer loan ABS
– made up the remaining 28.6%, highlighting the continuing momentum behind social securitisation.
Nevertheless, RMBS remains the prevailing transaction type among ESG securitisations – accounting for 40% of the ESG deals recorded in SCI’s primary issuance data. The UK alone accounting for €2.4bn of all ESG issuance in the structured finance market last year, according to AFME.
The trajectory of future ESG securitisation transactions may rest largely in the hands of upcoming regulatory developments. The European Commission is expected to publish its review of the securitisation framework in Q2 2025, with potential implications for ESG-labelled deals.
"The Commission will make proposals on its securitisation review in Q2 of this year, and it will be interesting to see if this can help revive the securitisation market," Suarez said. "If regulators can agree on facilitating securitisation’s contribution to the wider market, ESG securitisation will follow suit."
While the UK, the Netherlands, France and Germany, continue to dominate ESG issuance, this reflects their prominence in the broader securitisation market. Hopes remain for further green mortgage issuance out of France via BPCE, and additional ESG-linked data centre deals seem likely. Market participants are also watching for follow-up or inaugural issuance from lesser-tapped jurisdictions such as Spain, which issued a solar ABS in 2023 but has yet to return to market.
For now, the ESG securitisation market remains niche. But with the alignment of macroeconomic recovery, regulatory reform and growing investor scrutiny, market participants are hopeful that greater volumes still could be seen in 2025.
“The potential is there,” Suarez concluded. “We should expect to see even more prominent participation beyond the €5.4 billion seen in 2024.”
News Analysis
CLOs
European CLO issuance up year-on-year
March 2025 European CLO issuance increased by approximately 17.67% compared to March 2024 and decreased by 34.05% compared to February 2025
Primary
European CLO issuance reached €6.26bn in March, compared to €5.32bn in March of last year and €9.49bn in February 2025. Deal sizes were notably large, peaking at €515m for RRE 8 Loan Management, and spreads were tight. Eight resets priced during March, while four refinancings occurred.
| EU new issues |
Pricing date |
Size (Єm) |
Arranger |
SCI article |
| RRE 8 Loan Management |
21/03/2025 |
515.32 |
BNP Paribas |
Link |
| RRE 7 Loan Management |
21/03/2025 |
514.28 |
BNP Paribas |
Link |
| RRE 25 Loan Management |
14/03/2025 |
512.75 |
BNP Paribas |
Link |
| Avoca CLO XXXII |
10/03/2025 |
509.80 |
Goldman Sachs |
Link |
| Arcano Euro CLO I |
12/03/2025 |
443.08 |
Jefferies |
Link |
Discussing CLO performance in March, Pratik Gupta, head of CLO & RMBS research at BofA Securities, notes that spreads widened in the primary market, with top-tier triple-A’s being issued close to 125-128 basis points compared to 112 basis points at the tightest point in February. “We are seeing similar trends in double-B’s, which widened by 75 basis points for the top tier. Comparable trends were noted in Europe, where triple-A spreads widened by 10 basis points and double-B spreads by 70 basis points.”
With clearing levels widening in the primary market, the levels for single-A, triple-B, and double-B securities have increased significantly this month by approximately 16, 17, and 27 basis points, respectively.
“It’s essential to note that new issues typically trade tighter than resets. This is largely due to reset portfolios containing a wider range of CCC-rated securities and their associated tail risks, resulting in wider spreads and greater dispersion,” Michael Htun, head of CLO at Kartesia tells SCI.
“Primary transactions are still being completed. If we consider the first quarter as a whole, we're significantly ahead of where we were at this time last year. However, much of this increase is due to the heavy supply we saw in February, which resulted in tighter spreads. Particularly at the investment-grade levels, spreads were extremely tight,” Htun explains.
“To summarise, we have effectively erased all the spread gains we observed at the beginning of the year. We are now back to levels similar to those at the start of this year. The aggressive tightening that occurred in January and February has completely retraced,” he adds.
Turning to CLO drivers, loan supply has been scarce lately, with a notable lack of new money hitting the market over the past few weeks. This contrasts with 2024, when most activity was driven by refinancing and recapitalisations, which involved significant issuance but had a small actual new money component.
“It's worth mentioning that some of the more opportunistic refinancings were pulled last week due to market volatility. While CLO creation has been strong at the start of the year, there hasn't been a corresponding increase in the supply of new money loans. This is something the CLO investor community is closely monitoring, especially regarding how managers are ramping up and assembling their portfolios,” Htun observes.
However, from an equity investor's perspective, Htun notes that historically tighter CLO spreads present an attractive opportunity. “With new issue resets occurring, if we can secure that liability structure—especially given the available leverage multiples—we effectively buy ourselves optionality amid the current asset-side volatility,” he says.
Secondary
Recently, the CLO secondary market exhibited signs of broader market volatility, although it may take time for this to impact the primary market. “When market movements occur, it takes time for them to be reflected in primary transactions,” Htun states.
Gupta also highlights that CLOs experienced increased volatility in the secondary market, with AAAs widening by 10-15 basis points initially before tightening back to finish 3 basis points wider compared to February-end levels.
“Double-Bs witnessed spreads widen by almost 75 basis points before tightening by 25 basis points, ultimately ending up 50 basis points wider against February-end levels,” Htun says.
Overall, the secondary market behaved as anticipated throughout March, with significant supply causing spreads to widen in early to mid-month.
“It seems we have stabilised at these wider levels, and ‘orderly’ is the term I keep hearing to describe the situation. Investors appear to be looking to exit and crystallise their positions at reasonable levels,” Htun adds.
Looking ahead
Furthermore, Htun believes that low defaults and distress ratios are leading to a positive outlook on equity, especially in Europe.
He says: “I expect month-on-month returns to decrease, with quarter-on-quarter returns flat to slightly up due to carry. U.S. loan spread sell-offs may widen European levels, but adjusted levels appear more appealing with strong credit performance.
Overall, the investment landscape looks better than a month ago, driving renewed demand. I'm optimistic about market value, though I'm concerned about potential credit deterioration and defaults impacting returns.”
When it comes to how CLO drivers would behave over the next quarter, loan issuance speed proved to be slower in March compared to November 2024 expectations.
Gupta maintains a neutral outlook for the CLO secondary market, taking into account the increased potential for tail risk and better opportunities for returns in high-quality fixed income.
“There remains capital available on the sidelines, which has provided a floor on prices, although increased fundamental tail risks remain relevant. We expect continued volatility in spreads throughout the year until clarity on policy outcomes emerges.”
Source: SCI data
Camilla Vitanza
News Analysis
CLOs
Seasoned CLO double-Bs show diverging discount margins
Poh-Heng Tan from CLO Research provides insights on recent secondary trading activity in US BSL CLO double-B tranches, highlighting key pricing dynamics, market drivers, and deal-specific factors
As more CLO BB tranches move further beyond their reinvestment periods, secondary market dynamics have begun to reflect a wider divergence in performance and risk pricing.
An analysis of double-B bonds more than a year post-RP reveals a broad spectrum of discount margins, underscoring how structural seasoning, prepayment behavior, and deal-specific fundamentals are shaping valuation outcomes across the stack.
|
% |
BWIC Date |
MVOC |
Cover Price |
DM (SCI) |
DM/WAL (Dealers) |
Reinv End Date |
Post-RP Annualized Prepay Rates (Yr1/2/3) |
|
BLUEM 2015-3A DR |
Mar 25, 2025 |
101.87 |
88.89 |
914 |
916 | 4.09 |
Apr 20, 2023 |
14%/25% |
|
NBCLO 2016-1A DR |
Mar 25, 2025 |
102.92 |
97.89 |
709 |
721 | 3.62 |
Jan 27, 2022 |
3%/18%/33% |
|
VOYA 2018-3A E |
Mar 25, 2025 |
103.39 |
95.00 |
712 |
740a | 4.57 |
Oct 15, 2023 |
21%/27% |
|
ARES 2018-47A E |
Mar 25, 2025 |
105.22 |
99.73 |
588 |
584 | 3.88 |
Apr 15, 2023 |
25%/34% |
|
NEUB 2013-14A ER2 |
Mar 25, 2025 |
106.54 |
100.33 |
697 |
689 | 3.32 |
Jan 28, 2022 |
2%/16%/28% |
|
NEUB 2019-32A ER |
Mar 24, 2025 |
105.10 |
100.13 |
636 |
632 | 4.61 |
Jan 19, 2024 |
7% |
Based on SCI BWIC data, among the four bonds trading below par, the tightest, Ares 2018-47A, was priced below 600dm, while the widest, BLUEM 2015-3A, was above 900dm. Ares-managed deals with reinvestment periods ending in 2023 — nine in total — are typically called or reset within the first two years post-RP. Their average prepayment rate in year one after RP was around 26%, significantly higher than the median rate of 20% for deals with RP ending in 2023.
BLUEM 2015-3A has a weak MVOC of less than 102%, and the deal has a negative equity NAV, indicating it is unlikely to be called in the foreseeable future. Its wide DM reflects the elevated credit risk associated with the bond.
NBCLO 2016-1 and VOYA 2018-3 traded at similar DMs. While the former has a slightly lower MVOC, it benefits from a shorter WAL. Both bonds are expected to see elevated prepayment rates going forward.
NEUB 2013-14 and NEUB 2019-32 traded above par, supported by strong MVOCs, and their wider DMs reflect the associated call risk. NEUB bonds typically experience lower prepayment rates, particularly during the first two years post-RP. Given they are trading at a premium, a slower prepayment rate is actually advantageous. That said, NEUB 2013-14 is now entering its third year post-RP, making it much harder to maintain a low prepayment rate.
|
|
BWIC Date |
MVOC |
Cover Price |
DM (SCI) |
DM/WAL (Dealers) |
Reinv End Date |
Optional Redemption Earliest Date |
|
CIFC 2019-FAL E |
Mar 25, 2025 |
104.19 |
100.19 |
766 |
762 | 5.55 |
Jan 20, 2025 |
Jan 20, 2022 |
|
NEUB 2019-34A ER |
Mar 25, 2025 |
104.56 |
100.19 |
649 |
645 | 5.71 |
Jan 20, 2025 |
Jan 20, 2023 |
|
APID 2019-32A ER |
Mar 25, 2025 |
106.11 |
99.74 |
562 |
556 | 5.54 |
Jan 20, 2025 |
Dec 25, 2024 |
As shown in the table above, the three bonds from the 2019 vintage have recently concluded their reinvestment periods.
The range of their DMs largely reflects their respective MVOC levels, with APID 2019-32 showing the strongest MVOC — in the 106s — among them.
|
|
BWIC Date |
MVOC |
Cover Price |
DM (SCI) |
DM/WAL (Dealers) |
Reinv End Date |
Optional Redemption Earliest Date |
|
ARES 2017-44A DR |
Mar 25, 2025 |
104.34 |
99.36 |
733 |
727 | 6.41 |
Apr 15, 2026 |
Apr 15, 2023 |
|
RRAM 2021-17A D |
Mar 25, 2025 |
104.49 |
98.57 |
713 |
707 | 6.47 |
Jul 15, 2026 |
Jun 24, 2023 |
|
ANCHC 2020-15A ER |
Mar 25, 2025 |
104.48 |
99.88 |
774 |
768 | 6.51 |
Jul 20, 2026 |
Jul 20, 2023 |
|
RRAM 2021-16A D |
Mar 25, 2025 |
104.94 |
99.60 |
665 |
659 | 6.43 |
Jul 15, 2026 |
Jun 10, 2023 |
|
AIMCO 2021-15A E |
Mar 24, 2025 |
105.38 |
99.97 |
627 |
622 | 6.55 |
Oct 17, 2026 |
Oct 17, 2023 |
Next, looking at deals with reinvestment periods ending in 2026, the first three bonds have similar MVOC levels, with discount margins ranging from 713 to 774 DM. ANCHC 2020-15 traded at a noticeably wider DM, although the bond shows little convexity as it is already priced around par.
AIMCO 2021-15 had the tightest DM, reflecting the strongest MVOC among the five bonds. According to CLO Research’s manager rankings based on MVOC, Allstate has performed well across its deals.
|
|
BWIC Date |
MVOC |
Cover Price |
DM (SCI) |
DM/WAL (Dealers) |
Reinv End Date |
Optional Redemption Earliest Date |
|
OHALF 2015-1A ER3 |
Mar 24, 2025 |
105.87 |
100.34 |
689 |
684 | 6.69 |
Jan 19, 2027 |
Dec 02, 2023 |
|
WINDR 2021-4A E2 |
Mar 25, 2025 |
102.66 |
90.32 |
881 |
875 | 6.93 |
Jan 20, 2027 |
Jan 20, 2024 |
The two bonds above have just under two years remaining in their reinvestment periods. OHALF 2015-1 has a solid MVOC of nearly 106, while WINDR 2021-4 shows a weaker MVOC of below 103. The latter traded close to 900 DM, reflecting the associated elevated credit risk. In contrast, OHALF 2015-1's relatively wide DM reflects call risk. OHA is one of the most prolific managers when it comes to resetting deals — unsurprising, given the manager’s strong performance.
|
|
BWIC Date |
MVOC |
Cover Price |
DM (SCI) |
DM/WAL (Dealers) |
Reinv End Date |
Optional Redemption Earliest Date |
|
BABSN 2023-1A E |
Mar 26, 2025 |
108.54 |
100.39 |
797 |
792/223 | 7.61/0.07 |
Apr 20, 2028 |
Apr 20, 2025 |
|
HLM 2023-17A E |
Mar 26, 2025 |
108.60 |
100.19 |
796 |
791 | 7.65 |
Apr 23, 2028 |
Mar 29, 2025 |
|
OAKC 2024-19A E |
Mar 25, 2025 |
108.24 |
100.70 |
554 |
548/503 | 9.14/1.32 |
Jul 20, 2029 |
Jul 20, 2026 |
|
GLM 2022-12A ER |
Mar 24, 2025 |
106.05 |
99.89 |
577 |
572 | 9.13 |
Jul 20, 2029 |
Jul 20, 2026 |
|
CEDF 2020-12A ERR |
Mar 25, 2025 |
106.39 |
98.28 |
670 |
665 | 9.51 |
Jan 25, 2030 |
Jan 25, 2027 |
|
RRAM 2025-37A D |
Mar 24, 2025 |
107.39 |
97.25 |
512 |
506 | 9.75 |
Apr 15, 2030 |
Apr 15, 2027 |
RRAM 2025-37 traded at a relatively tight level—tighter than some primary reset deals such as OHA Credit Funding 14-R—despite the latter’s BB tranche having a higher MVOC in the 108s. That said, RRAM 2025-37 traded at a discount, making it more attractive to debt investors.
Three bonds with MVOCs in the 108s traded above par. The highest-priced bond, OAKC 2024-1, was priced at a tight 503 DM to call.
CEDF 2020-12 traded much wider than GLM 2022-12, largely due to its slightly longer WAL. Both deals have MVOCs in the 106s.
In a slightly volatile market, bonds trading above par may actually benefit, as the associated call risk is lower.
SRT Market Update
Capital Relief Trades
Green SRTs
EIB Group and BBVA sign new SRT
The EIB Group has completed a new synthetic securitisation transaction with BBVA, allowing for 100% green projects.
The securitisation is on a portfolio of over €1.4bn in loans to SMEs. BBVA will retain the senior and junior tranches, while the EIB Group will guarantee the mezzanine tranche of €93m. This investment will allow BBVA to mobilise around €185m to finance the construction of residential buildings with near-zero emissions by SMEs and mid-caps in Spain’s real estate sector.
The transaction has been structured to meet the STS criteria, and includes a synthetic excess spread mechanism and uses pro rata amortisation (which may be changed to sequential). Finally, the operation is backed by InvestEU and supports the strategic priorities of the EIB Group, which include climate action, access to affordable and sustainable housing, cohesion and the capital markets union.
BBVA and the EIB Group last cooperated last year on a synthetic securitisation referencing a portfolio of mortgages and in the true-sale BBVA Consumer 2024 securitisation.
In other news
BBVA upsizes Verano IV from €2bn to €6bn, further amplifying its commitment to sustainable finance.
The transaction which was completed last November, is widely perceived as a blueprint for the market through its coupon step-down mechanism on green criteria.
The upsized transaction now also brings Swedish occupational pension fund Alecta to the table as a second investor (along with PGGM). Such strategic expansion reflects growing investor appetite for ESG-integrated financial solutions.
More than 30% of the enlarged portfolio is linked to ESG performance indicators, tying capital costs directly to borrowers’ sustainability outcomes. Additionally, the expanded €6bn portfolio includes loans to large corporates across the US, Spain, and other European markets.
Finally, the transaction is structured to comply with the EU’s STS criteria, delivering 79% capital relief for BBVA and significantly enhancing the bank’s capital efficiency.
Nadezhda Bratanova, Vincent Nadeau
News
Asset-Backed Finance
Standardisation key to ABF evolution
Technology driving the 'best outcome' for borrowers
The ability to be nimble is proving to be a competitive edge in the burgeoning ABF market. Participants in a recent SCI webinar on private credit highlighted the important role data and technology are playing in the evolution of this sector.
“Our goal is to double or triple our AUM, without the headcount growing commensurately,” said Patrick Hart, deputy cio and head of portfolio management and lending at ATLAS SP Partners. “So, the question is how do we create the appropriate operational leverage in our ecosystem? The answer is by building our own tools and acquiring technology or outsourcing to a specialist firm.”
He added: “For example, by parsing documentation, we can unlock information that allows our teams to make better credit decisions and use their expertise to focus on higher-value analysis rather than simply quality control. Bringing technology to bear enables the right credit lens to be applied to different asset classes, in order to drive the best outcome for borrowers.”
ABF transactions typically rely on unstructured data, such as underlying leasing agreements and performance metrics. Given the private nature of the market and its rapid growth, there is a desire for greater transparency, according to Scott Alintoff, svp, business unit executive, syndicated loans and private debt at FIS.
“Participants need tools to process and ingest a wealth of data and present it to their customers in a meaningful way. Clarity is facilitated by standardisation: increasing the standardisation of credit agreements would be a great first step,” he noted.
Hart pointed out that investors and lenders have their own approaches to data management. “Consequently, there will always be some uniqueness in terms of approach. However, as participants become more comfortable and the public and private markets merge, I anticipate that uniform reporting will facilitate a migration away from opacity. Greater transparency drives more robust financing solutions.”
AI is playing an important role in the evolution of the private credit market, but Alintoff suggested that “it can only get you so far down the road”. He added: “The market views AI as an interesting opportunity and a bit of an arms race is occurring. But currently it is being utilised for things like sharpening up blurry documents, for instance.”
With bank retrenchment post-financial crisis, consumers have changed the way they think about access to credit and capital. And, as the private credit market grows, opportunities are expected to open up for retail investors – with technology playing its part.
“Away from large financial institution complexes, high net-worth individuals and family offices are already looking at private credit opportunities. But the ‘bite size’ continues to decrease,” Hart confirmed.
With respect to the ABF segment specifically, Hart estimates the potential addressable market to stand at an eye-watering approximately US$20trn. “ABF has expanded from essentially being a leveraged loan replacement to addressing the broader credit market and providing a variety of alternatives to standard corporate lending products. In particular, we’re seeing continued interest in the energy transition and digital infrastructure sectors,” he explained.
Corinne Smith
News
Capital Relief Trades
PAG concludes fundraising
Asia-focused investment firm plans further expansion in Japan, signalling growing deal pipeline
PAG has concluded fundraising for its third SRT vehicle - PAG BRS Fund III, securing US$1.25bn in total commitments, including co-investments.
The fund received strong support from institutional allocators, with commitments from sovereign wealth, pension funds and endowments across North America, Europe, Middle East, and the Asia Pacific.
The firm, which manages over US$4bn of SRT investments, remains highly optimistic about market growth, with plans to potentially launch its Fund IV in 2026, James Parsons, partner at PAG tells SCI.
Parsons, who heads the firm’s London-based SRT team, notes that demand for SRT transactions keeps accelerating, with the market’s annual growth rate expected to rise from 20%-25% to 30%-40% over the next two years. “There is a positive network effect in SRT. As more banks complete transactions, others that haven not previously been active are encouraged to enter the market, because they see their peer group and competitors issuing SRT,” he says. “This includes both traditional markets like Europe as well as newer jurisdictions. It is now recognised as a tool to optimise balance sheets, manage capital, and unlock a range of other benefits.”
Asia in focus
Parsons also highlights Japan as a vibrant and promising market for SRT expansion, especially after the country’s full implementation of Basel IV and its potential for greater transaction volumes from major banks.
“The big Japanese banks have been active, but we expect them to do more,” he says. He and his team have already started discussions with prominent SRT players in the region, as demand from investors also continues to grow. Korea and Taiwan have been flagged as attractive areas, however PAG is yet to dedicate time to explore those opportunities in greater detail. “We’re detecting more interest in Asia, but I don’t think it will necessarily lead to immediate new business this year,” Parsons adds.
Other geographies such as Australia remain a challenge, with regulators currently completely preventing banks from using SRT for capital relief. “Australia is an exception as SRT transactions are not permitted yet,” Parsons explains. “The big four banks there could definitely benefit from it.”
Further boost in European & US markets
Parsons says that traditional markets like Europe are likely to see a boost of issuance within individual countries that have recently made their first steps in the space. He comments that Poland has seen a notable development in transactions over the past three years, while Italy’s market continues to expand beyond its largest banks. “It is not just the big two anymore,” Parsons points about the country's evolving landscape. According to ongoing industry talks, jurisdictions such as Greece are set to become more active, while some investors are looking at more uncharted territories. “Turkey and South Africa are quite challenging markets, but there is more talk about potential deals there”.
Elsewhere, US banks are gradually scaling up their SRT/CRT activity, with institutions that have already completed their initial transactions, now moving on to execute more deals. Despite ongoing regulatory constrictions in the face of the US$20bn portfolio cap for CLNs as well as requirements around investor structure, Parsons thinks that the environment will continue to be favourable. “The US is complicated by the restrictions around how banks can issue. Most investors would like a note, but many have to set up SPVs due to regulatory hurdles, making the process clunky,” he explains. “The US market is just taking time to develop. Europe took 18 years to get here—it is unrealistic to expect the framework in the US to have everything ironed out in two or three.”
As PAG gears up for its next fund, investor awareness of SRT strategies is deepening. While earlier fundraising rounds required extensive education on SRT fundamentals, LPs—particularly in North America, Northern Europe, and the Middle East—are now more familiar with the asset class. “By Fund III, especially in the closing phases, there was much less explaining what SRT is and more focus on what we specifically do in SRT,” Parsons shares.
With the US market poised for success and Asia beginning to gain traction, PAG remains optimistic about the trajectory of SRT investing. Parsons concludes: “SRT has reached adolescence. There is still work to do, but the market is maturing, and we expect significant growth ahead”.
Nadezhda Bratanova
News
CLOs
Canyon Partners closes nearly US$1bn CLOs across US and Europe
The latest deals bring the firm's CLO AUM to over US$10.9bn
Canyon Partners has today closed two of its CLOs totaling nearly US$1bn. With these closings, the firm now manages over US$10.9bn in combined CLO AUM through 24 active CLOs.
Arranged by Bank of America, Canyon Euro CLO 2025-1 is Canyon's first new issue CLO of the year, with a 1.5-year non-call period and 4.5-year reinvestment period. Canyon CLO 2025-1, arranged by Barclays, has a two-year non-call period and five-year reinvestment period.
Both deals are structured to comply with European risk retention regulations. The majority equity for each will be funded by the Canyon CLO Fund IV.
Both CLOs reinforce Canyon's investing activity throughout 2024, during which time it issued three deals in the US and Europe, accounting for over US$1.5bn.
Among the 2024 deals, Canyon Euro CLO 2023-1 was the largest CLO to clear the European market in nearly seven years, according to the firm.
Erik Miller, partner, co-head and co-portfolio manager of Canyon's CLO business, says: "We continue to enhance our global CLO platform to position Canyon to capitalise on a historically tight liability spread environment. By investing in our people and resources, we believe we have built a platform with the ability to deploy capital rapidly as opportunities arise.”
Canyon has also been “capitalising on the tight CLO liability environment” by actively managing its existing CLO debt, the firm highlights.
In the last year, the platform has refinanced or reset a total of seven CLOs to tighter weighted average debt costs, an outcome that typically results in greater equity distributions.
Speaking to SCI in January, Miller told SCI he forecasts another strong year for CLOs fuelled by robust investor demand and tightening spreads.
Canyon has launched and managed through its affiliate, Canyon CLO Advisors, 31 CLOs and CDOs since 2001.
Ramla Soni
Market Moves
Structured Finance
Job swaps weekly: KBRA head of CMBS surveillance and research retires
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees
KBRA
naming a successor to outgoing head of CMBS surveillance and research
Roy Chun, who is to retire. Elsewhere,
Jefferies
has named a new fixed income chief risk officer, while and MDPG Advisory director and an S&C Capital founder have formed a new London-based litigation finance and advisory boutique.
KBRA
has announced the retirement of
Roy Chun, senior md and head of its CMBS surveillance and research groups. He departs after seven years with the firm, where he played a pivotal role in enhancing KBRA’s CMBS ratings framework. Prior to joining KBRA in 2018, Chun held senior roles at S&P, the FDIC and Freddie Mac.
He will be succeeded by
Rob Grenda, who has been promoted to senior md and will now lead the CMBS surveillance and research functions. Grenda has been with KBRA as a senior director since 2019. Grenda previously served as a CMBS analyst at Morningstar Credit Ratings. He brings more than a decade of experience in structured finance and credit analysis to the role.
Meanwhile,
Jefferies
has appointed
Florent Cohen
as fixed income chief risk officer, based in New York. He has over 20 years of experience in trading and managing large fixed income portfolios, with a strong background in corporate credit, structured credit and MBS on both the buy- and sell-side.
Most recently, Cohen was the head of risk for Brevan Howard’s credit business, which he joined in April 2021. Before that, he worked at RBC, Nomura and BNP Paribas.
MDPG Advisory director
Matthew Gwynne
and S&C Capital founder
Edwin Harrap
have formed
Litigation Capital Solutions, a London-based litigation finance and advisory boutique. The JV aims to assist law firms seeking specialist funding, litigation funds seeking corporate advisory and capital raising services, and investors looking to participate directly or indirectly in litigation funding.
Gwynne founded MDPG Advisory in April 2023 and was previously director, business development and client relations at SpectraLegal, a specialist funding solutions provider serving the legal sector. Before that, he served as head of credit structuring, UK and Channel Islands at Standard Chartered and worked in specialised lending at Investec.
Harrap founded S&C Capital in September 2024 and was previously a director at Alantra, focusing on structured credit, NPLs and litigation finance. Before that, he worked at Deutsche Bank and KPMG.
PGIM Fixed Income
has appointed
Oliver Nisenson
as head of asset-based finance, effective 15 May. In this role, he will lead the expansion of the firm’s global private ABF platform, reporting to Gabriel Rivera and Edwin Wilches, co-heads of securitised products. Nisenson joins from Blackstone Credit and Insurance, where he had served as senior md overseeing ABF investments since 2022. Prior to that, he held leadership roles at Credit Suisse and was a founding partner at 20 Gates Asset Management.
MUFG
has appointed
Kenny Rosenberg
as its new head of ABS syndicate, naming the long-time securitisation banker as successor to
Lauren Hoard
who left the firm earlier this year. Rosenberg joins from Morgan Stanely and has more than 25 years of experience in the industry, having also held senior positions at Barclays, Credit Suisse and Prudential Financial previously.
In the wake of Rosenberg’s departure,
Morgan Stanley has promoted
Brian Logan
as its new head of ABS/RMBS syndicate. Logan, who joined the firm in 2022 from Nomura as executive director, brings more than a decade of experience to the role.
Davis Polk
has hired Cadwalader, Wickersham & Taft structured finance lawyer
Ryan McNaughton
as a partner in its New York office. McNaughton leaves his role as partner at Cadwalader after two years with the firm, having previously worked at King & Spalding and Paul Weiss Rifkind Wharton & Garrison. He advises clients including lenders, institutional investors, private equity funds and borrowers on a range of structured and asset-backed financings, with a particular focus on esoteric asset-backed securities.
Dechert
has continued the expansion of its structured finance and private credit practice with the appointment of
Brian Whaley
as a partner in its New York Office. Whaley joins from Paul Hastings, where he advised clients on a range of private credit vehicles, CLOs, and ABS transactions. His arrival comes on the heels of the recent addition of Craig Cohen, CLO and securitisation professional, who joined the firm’s global tax group as a partner, also in New York.
Encina Private Credithas appointed
Matt Giamalis
as svp, originations, effective immediately. In this role, Giamalis will leverage his experience in corporate finance and private credit to enhance the firm's origination of first-out enterprise value loans across key industry sectors.
Giamalis has a background in leveraged lending, having previously held senior positions at Firmament, Capital One and GE Capital. Most recently, he served as vp of originations and special situations at Firmament, where he sourced and closed equity investments across various industries.
Venn Partners
has promoted head of risk and asset management,
Stephen Hughes, to md. Hughes joined the firm in London
last year
as a director from KBRA, where he led its European CMBS, CRE and loan ratings and head of portfolio management.
Kartesia
has appointed Benjamin Schall as head of DACH. Schall brings experience in private debt investments, with expertise in direct lending, portfolio management, deal origination and structured financing. Kartesia says the appointment is part of a strategic plan to strengthen its presence in the region.
Schall leaves Apera Asset Management’s Munich office after almost five years with the business, where he was a partner responsible for private debt investments in the DACH region. Prior to that he spent 13 years at UniCredit in several roles including director of leveraged finance and director of debt capital markets.
And finally,
Pemberton Asset Management
has promoted partner
Juergen Breuer
to head of European origination for its GP solutions and NAV financing strategies. Breuer transitions from his position as head of DACH and has been with Pemberton for 10 years. He was previously managing partner at Astorius Capital and held 'head of' positions at WestLB and Dresdner Kleinwort. Based in London, he will work alongside head of GP solutions and NAV financing Thomas Doyle.
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