Participants in the New Zealand securitisation market believe the asset class has an increasing role to play in the local credit landscape on the back of growing momentum in recent years. Economic and regulatory challenges are likely to put a ceiling on near-term growth but there is a baseline level of confidence in asset quality and the risk-return equation of structured finance.

Australian mortgage lenders say their books – and the securitisation and covered-bond structures they use to fund them – are of sufficient quality to withstand growing pressure on loan serviceability as rates continue to rise and cost of living challenges grow. Speakers at an Australian Securitisation Forum investor briefing in London noted solid prepayment and serviceability buffers while acknowledging that arrears will inevitably climb.

COVID-19 has profoundly affected how people work, especially in largely urban, professional industries like capital markets. As part of the 2021 Australian Securitisation Forum virtual conference, leaders with a range of perspectives shared their views on whether the shift to wide-scale home working will persist in the long term, how it affects equity across the workforce – particularly through a gender lens – and the value of face-to-face working.

Securitisers not embracing sustainability-aligned issuance could expose themselves to future pricing risk as investor mandates demand more green bonds, according to market participants speaking about a new Australian Securitisation Forum-Perpetual report.

The outcome of new EU securitisation regulations that passed into law on 25 March is more positive for Australian issuers than was feared when the changes were first proposed, intermediaries say. Some challenges remain, but it now seems likely that the worst-case scenario – European investors being effectively precluded from participation in Australian-origin transactions – has been averted.

The dearth of consistent data and reporting standards is likely the primary factor holding back green, social and sustainability-linked securitisation issuance in Australia, according to speakers at an Australian Securitisation Forum webinar. If such issuance did come to market it would likely be well received on the buy side.

Changes to the EU’s securitisation regulation proposed late in 2020 have been a thorn in the side for Australia’s securitisation industry in the opening months of the year. The amendments put a prohibition of investment from EU-based entities on the cards. However, with a date approaching for the proposals’ reading in the EU parliament, industry figures are confident the issues will be resolved.

Nearly a year since the Australian Office of Financial Management (AOFM) deployed its first investment from the Australian Business Securitisation Fund (AOFM), the government debt-management agency is seeking to reinvigorate its mandate to develop the SME financing market. COVID-19 forced a focus on emergency liquidity mechanisms and put the ABSF on hold, but the AOFM believes the experience may now allow it to fast-track its longer-term ABSF aims.

The Australian Office of Financial Management (AOFM) and Australian Securitisation Forum (ASF) are finalising terms for a forbearance special-purpose vehicle (SPV), designed to provide relief to nonbank and small bank lenders with securitisation trusts affected by forbearance on loans as a result of COVID-19.

The prospect of QE in Australia has loomed ever larger over the market in 2019 as the Reserve Bank of Australia (RBA) has moved into an easing cycle and the cash rate has approached the zero lower bound with little sign of a significant economic rebound. At Australian Securitisation 2019 in November, prominent Australian debt investors cast their eyes over the likelihood of Australian QE, what a local regime might look like, the potential consequences and what alternatives there are to stimulate the economy.