9 April, 2011:
As per TheCityUk report, the global securitization volumes have risen 49% to USD 739 billion in 2010 with US continuing to be the dominant market with 81% of issuance in 2010. In Europe alone the net issuances increased from USD 26 billion in 2009 to USD 96 billion in 2010, largely due to recovery in the investors’ sentiments. Also it was noticeable that the downgrades and defaults in the US securitization markets has been much greater than Europe
The factors responsible for higher volumes of issuance have been low risk profile collateral and simple and transparent structures. Apart from US and Europe the main markets of securitization, as per the report have been Australia, Canada, Japan and South Korea.
The global securitization markets had slumped in 2007 due to the turbulence in the credit markets and reduction in investor’s tolerance for risk; originated by the sub-prime crisis. However, despite withdrawal of support provided to securitization markets in many countries and competition from growing volumes of covered bonds and other funding methods, increase in securitization issuance volumes have been positive.
Get the text of the report, Securitisation, 2011 here.
[Reported by: Nidhi Bothra]