On June 12, the ASF held its annual investor seminar in London. ~90 attendees gathered at the offices of Bloomberg L.P where they heard from economists, issuers, arrangers, researchers and investors as they provided insights into the current state of the securitisation industry in Australia and New Zealand. Key takeaways included:
Economic outlook: David de Garis (Director, Economics, National Australia Bank), spoke of the Reserve Bank of Australia's narrow path out of Australia's current inflation environment. He expects further rate increases and noted that recent hikes have begun to have an impact.
Download the presentation - The “narrow path” - Renewed inflation worries meet under-supplied housing
Arrears: Higher rates have lead to an increase in loan arrears however they remain within the expected range having come from an historic low.
Origination and issuance trends: Non-bank issuers continue to see demand from borrowers who do not meet bank lending criteria. Many are diversifying their loan offerings which has driven strong growth in ABS issuance in 2023. In addition, ADI issuers have been returning to securitisation issuance with the roll off of the Term Funding Facility (TFF).
KangaNews event report:
Evolving funding and lending dynamics to drive Australian securitisation issuance
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A challenging environment for nonbank lenders as the likelihood of a soft landing in the Australian economy recedes may mean less securitisation supply, local market participants suggested at an investor briefing in London. On the other hand, bank issuance, nonmortgage securitisation, collateral quality and increasingly positive demand conditions should support the sector through the next phase.
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Related resources:
Australian Securitisation Journal - Edition 24 - June 2023
Australian and New Zealand Securitisation Market Statistics
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