In depth

Market trends

• There is significant momentum in the European asset-backed securities (ABS) markets, with strong investor demand from 2024 continuing into 2025, notwithstanding the challenging geo-political environment as articulated by Ben Wallace in his keynote speech and the evolution of the regulatory framework.
• Investor demand remains high – helped by the increasing diversification of collateral and structures available to them. The ABS market is nothing if not innovative!
• Private credit and non-bank lenders are becoming significant players in the market, adapting securitization techniques to tailor funding solutions. They have attracted a number of investors (in particular, insurers investing in trade receivable platforms) and will play an important role in the growth of the market.
• Over the past couple of years there have been an increased number of attendees focused on automation, data and reporting. This trend continues – market participants certainly have a number of options when contemplating additional third party services that might assist throughout the lifecycle of a transaction.
• Market participants remain concerned that the number of transactions in the European ABS markets has not grown at the same rate as the US market. There should continue to be a focus on increasing the investor base, which would lead to greater liquidity and better execution, in order to drive demand. The naysayers would contend that there are insufficient assets in Europe to allow for true growth – a fact dispelled by a number of market participants during panel sessions.
• The key exception to comparisons between the European and US markets remains the Significant Risk Transfer (SRT) market, where Europe continues to lead the way in terms of deal numbers and size of issuance.

New asset classes

• Securitization is an adaptable funding technique. Assets previously considered "new" (for example, electric vehicles, solar loans or equity release mortgages) are now mainstream – with greater standardization has come a deeper (and more-educated) investor base, with tighter pricing to match.
• No surprise to the Baker McKenzie team (we first wrote an article on securitization as a funding tool for data centers back in 2021!), there is significant momentum behind digital infrastructure transactions. You now need more than one hand to count the number of private deals in Europe, with a handful of public issuances to boot. It won't be long before the first multi-jurisdictional European deal hits the market.
• It has now been an "emerging asset" for a couple of years, but the use of securitization in fund financing is also becoming more and more prevalent, with structures evolving to meet the flexibility required of fund managers.
• ESG related issuances continue to be discussed; the forthcoming favorable regulatory requirements will certainly help fuel green/ESG transactions.

Regulation, regulation, regulation

• There are significant regulatory changes afoot – the EU/UK Securitization Regulations are both in a state of flux, Basel 3.1 is rapidly approaching and there will even be a (much-awaited) consultation of proposed amendments to securitization-related provisions in Solvency II.
• On the Securitization Regulation front, the conference followed hot on the heels of the European Commission's proposals for amendments to the EU Securitization Regulation, published on 17 June 2025. Whilst there were no significant deviations from the previously 'leaked' version of the text, it was clear the market is still trying to digest all of the proposals and the potential impact they may have. The verdict? One step forward, two steps backward, with concerns regarding the new "public" definition and the increase in potential sanctions for investors' negligence or intentional infringement in relation to the investor due diligence and monitoring requirements in Article 5 cited as being particularly problematic.
• Notwithstanding the potential issues, market participants remain confident that the regulatory change continues in the right direction, with the reduction of capital charges particularly important to the future growth of the market.

European securitization

• Collateralized Loan Obligation (CLOs) are very much buzzing again! The current flurry of resets is expected to continue for the rest of the year as managers make the most of favorable conditions. However, EU CLO managers expressed concerns that the abovementioned proposals on the EU Securitization.
• Regulation will lead to an increased regulatory/reporting burden as CLOs listed on market- regulated exchanges such as Global Exchange Market (GEM) will fall within the new "public" definition. 
• Residential Mortgage-Backed Securities (RMBS) remains a solid asset class, particularly in the UK and The Netherlands; in contrast, the German market continues to be dominated by auto deals. Whilst these contrasts remain, both the RMBS and ABS markets have evolved over the past couple of years, with increased variety of collateral and new products gaining traction, fuelled by the increased number of specialty lenders entering markets across Europe.

Consumer regulation

• In the consumer space, the effects of increased regulation are visible, but not having a material impact on issuance (or defaults!). Where applicable, originators have adapted to the new requirements and investors are comfortable with the risk.
• Consumer Credit Directive II (CCD II) will apply in EU Member States as of 20 November 2026. Buy-now-pay-later products provided by third party lenders are explicitly included in scope of CCD II, as are hiring or leasing agreements with a purchase option.
• In the UK market, everyone is waiting with baited breath for the result of the Johnson vs. FirstRand Bank Limited (London Branch) t/a Motonovo, expected before the summer recess, albeit there is a perception that any "risk" is already captured in the pricing.

What's ahead

Attendance at the conference was at an all-time high, up nearly 10% from the previous year – productive meetings were held and new transactions are coming to the market. There will always be differing opinions as to the impact of regulation, the dangers of too much innovation and the balance of public vs private securitizations, and it is clear that we live in a challenging geo-political environment where the wrong tweet could result in untold devastation. But it is equally apparent that the European securitization market is robust and healthy, providing incentives for originators to receive funding through adaptable structures and investors to continue investing. Even the pessimistic would be converted after the positive buzz at Global ABS 2025.